Friday, May 13, 2011

AIM International Stock (NTT DoCoMo) Cited as a Morningstar 5-Star Noteworthy Japanese Stock

The AIM students recently added NTT DoCoMo (Ticker: DCM) to the AIM International Equity Fund. Morningstar just cited NTT DoCoMo as a noteworthy stock offer a compelling source of foreign exposure.

| Moat: Narrow | Fair Value Uncertainty: Medium
NTT DoCoMo, the largest wireless telephone operator in Japan, has been a leader in introducing cutting-edge technology to Japan's masses; the firm was the first to launch 4G wireless service in Japan, for example. Lately, the firm has been emphasizing cost-cutting in an effort to boost its return on capital, increase dividends, further its research-and-development efforts, and make acquisitions. 

Morningstar analyst Allan Nichols notes that DoCoMo has been seeing declining revenue as wireless penetration nears saturation, but he said that the firm's growth prospects look promising on the heels of the 4G introduction. Nichols also likes that the company boasts a healthy balance sheet with minimal debt, strong cash flows, and an impressive 3% yield.

AIM international telecommunications analyst, Jon Nolan, presented the stock in April 2011. This was the first Japanese stock obtained by the student-managers of the AIM International Equity Fund.

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