Is NII Holdings Inc (NASDAQ:NIHD) a good stock to hold?


Dallas, Texas 09/18/2013 (Financialstrend) – Some low-priced stocks offer attractive earning opportunities and history has proved that numerous pocket-change prices have the potential to generate incredible gains. No doubt there are risks and volatility is inevitable. In some cases, there are many good reasons for certain stocks to be battered or be cold-shouldered. However, there are also times when a rally in the market can do wonders for some of these ignored stocks.

The bright side

NII Holdings Inc (NASDAQ:NIHD) is a mobile communications provider that provides services under the Nextel Banner right across Latin America. The company is all set to add a great deal of cash to its piggy bank. It has agreed to sell almost 2,790 cell-towers in Brazil plus 1,666 towers located in Mexico in a transaction worth $811M. The company still needs these towers and will lease them back.

But the cash that is raised from this transaction will provide the company with much-needed liquidity. Apart from these sales, the company has also sold-off its operations in Peru in a deal worth over $410 million. The company’s stock had taken a bad beating last year after it posted decline in its wireless customers. However, it seems to be gaining a stronger footing. It closed its last quarter with 9.9M subscribers which was 100,000 over what it stood in 2012.

The flip-side

Though things seem a little bright, the dark clouds have all but blown away. The average revenue/user has dipped as the company is making every effort to hold onto its customers. In addition, NII Holdings Inc (NASDAQ:NIHD) has been losing a great deal of money which is not a healthy sign for a company as highly-leveraged as this one. The total of $1.2B that has been raised via the 2 deals is equal to the company’s market cap. However, its enterprise-value is above $5B, taking into consideration its heavy debt levels. The company definitely has some risk potential and also harbors some serious potential-upside.