Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

http://www.businessweek.com/stories/1994-03-06/dialing-for-vodafone

Businessweek Archives

Dialing For Vodafone


Inside Wall Street

DIALING FOR VODAFONE

Ever in search of underpriced growth stocks, money manager Larry Keblusek regularly screens some 800 companies, but only 100 to 125 of them end up in his $4.5 billion portfolio. One recent find, a British company whose American depositary receipts (ADRs) trade on the Big Board, "is a real gem," he says, with all the characteristics of a budding growth stock plus--believe it or not--a strong takeover appeal. The company is Vodafone Group, a mobile-communications outfit providing cellular, paging, and mobile radio services.

Trading at 90, Vodafone is "an undervalued play in the huge global cellular-phone business," says Keblusek, director of Northern Trust's Northern Investment Counselors in Chicago. Vodafone's core business, formerly known as Racal Telecom, is operating one of Britain's cellular networks, serving more than 55% of the country's subscribers.

It also has big stakes overseas, including a license to build and operate Australia's third network, a 30% interest in a Hong Kong cellular operator, 16% in a cellular network in Germany, 80% in a Maltese cellular operator, and 18.9% in a Swedish company licensed to operate three networks.

These interests could attract the likes of American Telephone & Telegraph and the Baby Bells. Speculation is that Vodafone is high on their lists of takeover candidates, says Keblusek. Vodafone shares are worth $180 in a buyout. Most U.S. companies in the business are highly leveraged, but Vodafone has little debt. He sees it earning $3.50 in the fiscal year ending Mar. 30, and $4 in fiscal 1995. It earned $3.01 in 1993. Vodafone, he says, "is the best global play in cellulars."GENE G. MARCIAL


LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus