Chad StutzRyan Cook

Fin 724/824

Review of RecommendationsOverweight Telecom

Telecoms have steady cash flows, so...

Balance SIM growth portfolio with “Defensive-Growth” stocksStructure holdings to emphasize wireless industry

Primary focus in emerging marketsAdd 156 bps to portfolio

SIM PORTFOLIO Sector Presentation earned an additional 156

basis points for the Telecommunications Sector

Currently the only stock the SIM portfolio holds in Telecommunications is America MovilQuantity Security Ticker

GIC Sector

Unit Cost Total Cost

Market Price

Market Value

Unrealized Gain/(Loss)

10,900 American Movil SA AMX

Telecom

41.04

$447,341.38 32.85

$358,065.00 ($89,276)

Approved May 26th S&P Weight SIM Weight Overweight Telecommunications 3.71% 3.96% 0.25%

América Móvil, S.A.B. de C.V. (AMX)3rd largest wireless network operator in world

182 mil wireless subscribersLargest corporation in Latin AmericaOperates in 18 countriesPrimarily Wireless Company

Fixed line operations in Central America & Caribbean

Operates in Mexico as Telcel = #1 wireless company

Operates in Brazil as Claro = #2 largest marketOperates in U.S. as TracFone = pre-paid provider

Valuation Analysis: Price Multiples

AMX - Target Price & UpsideCurrent Price $38.33 Implied equity value/share $43.62 Upside/(Downside) to DCF 13.81%

Sensitivity Analysis

AMX RecommendationUpside of 13.81% from DCF

Lowest DCF upside of 4 companies we reviewed

AMX is approaching maturity stage of life cycleEvidenced by market saturation in major

marketsGood company, but there are better

opportunitiesSELL all shares = 240 bps

NII Holdings, Inc. (NIHD)Originally organized in 1995 as a holding

company for the operations of Nextel Communications, Inc. in selected international markets.

Operates in the emerging markets in Latin America.

Beta of 2.22 very cyclical stock.Reports its results of operations in U.S.

dollars, therefore changes in exchange rates can affect earnings reports.

Valuation Analysis: Price Multiples

NIHD - Target Price & UpsideCurrent Price $20.46Implied equity value/share $30.70 Upside/(Downside) to DCF 50.03%

NIHD RecommendationUpside of 50.03% from DCFExtremely cheap price multiplesLatin American wireless

NIHD has more room to grow than AMXCyclical growth stockBUY 75 bps

Verizon Communications (VZ)iPhone contract with AT&T expires in 201o,

Verizon is in discussions with Apple to develop an iPhone for Verizon with the goal of introducing it next year.

40 percent of iPhone users are new AT&T subscribers, contributing to yet another net gain in wireless customers.

Verizon can expect similar results if Apple does produce a version of the iPhone for Verizon.

Valuation Analysis: Price Multiples

VZ - Target Price & UpsideCurrent Price $29.26 Implied equity value/share $35.22 Upside/(Downside) to DCF 20.35%

VZ RecommendationUpside of 20.35% from DCFUnderpriced multiplesiPhone on the horizon (4G)Domestic defensive stock = sector

diversificationBUY 50 bps

China Mobile Limited (CHL)World’s #1 mobile operator - in terms of

subscribers 415 mil wireless subscribers (2/3 of China market)

Largest company on Hong Kong Stock Exchange1/2 of new subscribers in 2007 from rural areas

Continued growth will be fueled by rural expansionState-owned corporationThis year, the company will start rolling out 3G

More data plans = more revenueiPhone?

Valuation Analysis: Price Multiples

CHL - Target Price & UpsideCurrent Price $49.21Implied equity value/share $80.76 Upside/(Downside) to DCF 64.11%

Sensitivity Analysis

CHL RecommendationUpside of 64.11% from DCFVery cheap price multiplesDefensive Growth companyOpportunities for continued growth in rural

regions3G on the horizon

Wireless data & possible iPhoneBUY 271 bps

RecommendationsRating Ticker BPS Upside

Sell AMX 240 13.81%

Buy VZ 50 20.35%

Buy NIHD 75 50.03%

Buy CHL 271 64.11%Total 396

AMX has low DCF valuation and is approaching maturity. Goodcompany, but there are better ones

VZ is a defensive domestic thatkeeps us diversified while positioning for growth

NIHD is a cyclical growth stock that seems undervalued and has a very impressive upside

CHL is a defensive growth stock with the highest upside and potential for major growth in rural regions