Vodafone Group Plc (ADR) (VOD) Trading Below Fair Value?… Einhorn Thinks So

Vodafone’s Core Business

Vodafone should benefit from its emerging market presence compared to competitors while Europe remains weak.    Also, smartphone’s account for less than 50% of their subscriber base, a number that clearly has room to grow.  As Vodafone further rolls out 3G and upgrades to 4G in South Africa and parts of Western Europe, the share of customers using smartphones should expand.

Conclusion

As Einhorn notes, Vodafone is attractive when looked at on a sum of the parts basis.  It’s valuation has diverged from competitors when taking Verizon Wireless into account and even more so from Verizon.  Pressure from shareholders to unlock value, improvements in smartphone penetration, and share repurchases could act as positive catalysts for the company.  That said, the acquisition of KSG could counter this and weigh negatively on the shares.

The article Vodafone Trading Below Fair Value?… Einhorn Thinks So originally appeared on Fool.com and is written by Mike Thiessen.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.