MTN Group Bouncing From Problem To Problem

Shares of pan-African mobile services provider MTN Group (OTCPK:MTNOY) are down less than 10% from the last time I wrote about the company. And yet, since that time, the company has reached a settlement with the government of Nigeria on a large fine, appointed a new CEO, and begun to make some significant changes to its long-term strategic plans. It's also worth noting that the iShares MSCI South Africa Index (NYSEARCA:EZA) is up more than 15% over the same time period, so MTN Group is definitely getting left behind.

The reasons are many and ought to trouble MTN Group's shareholders. Nigeria's economy remains a mess, the company's competitiveness in South Africa is still less than ideal, the company still has a significant leadership vacuum, and there are new allegations of serious financial malfeasance in Nigeria.

I've significantly cut back my expectations for MTN Group from a modeling perspective, as I believe the company will have to spend more on capex to drive growth, and I have also chosen to model MTN Nigeria separately (and with a significantly larger discount rate). After these changes, my fair value of around $10.50/ADR still leaves meaningful upside for a company leveraged to significant potential growth in subs and ARPU over the next decade and beyond, but "potential" is a dangerous word in investing and investors should approach MTN Group aware of the risks and challenges.

Continue here:
MTN Group Bouncing From Problem To Problem

Seeking Alpha: Taking Setbacks In Stride, MTN Group Should Be Ready To Outperform

To at least some extent, this has been one of those "if it can go wrong, it will" years for South Africa's MTN Group (MTNOY.PK). And yet, despite setbacks in Nigeria, Iran, and Syria, MTN Group continues to post solid revenue growth, expanding margins, and excellent returns on capital, while generating more cash than it needs to run the business. While political risk is always going to shadow MTN Group, this looks like an undervalued play on one of the best remaining growth stories in mobile services.

Please read more here:
Taking Setbacks In Stride, MTN Group Should Be Ready To Outperform