Friday, January 9, 2015

Seeking Alpha: Amidst Macro Worries, MTN Group Can Still Outperform

While a long-term bull on pan-African mobile phone services provider MTN Group (OTCPK:MTNOY), I was cool on the stock's near-term performance potential back in September. Since then, the ADRs have dropped about 25% while the local shares have fallen about 20%. That move hasn't occurred in a vacuum, with investors worried about the macro outlook in Nigeria and South Africa and company-specific concerns about MTN's performance in those large markets.

I remain bullish and I think the shares are looking more appealing on a short-term basis as well. I believe the market has over-corrected for the risks in Nigeria and underestimates the steps taken to improve results in South Africa and the long-term potential of mobile money services. Adverse currency moves have pushed my target down by about $1, but I think MTN Group remains a well-run play on growth in Africa and to a lesser extent the Middle East.

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Amidst Macro Worries, MTN Group Can Still Outperform

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