StockCall Technical Research on Telefonica and France Telecom: The European Economic Factor

 StockCall Technical Research on Telefonica and France Telecom: The European
                               Economic Factor

  PR Newswire

  LONDON, February 6, 2013

LONDON, February 6, 2013 /PRNewswire/ --

Investing in foreign company stocks is a good way to diversify a portfolio. It
helps in neutralizing the impact of local economic and legal factors. However,
at the very same time, it is rather complex to properly analyze these
equities. Even major company stocks like Telefonica SA (NYSE: TEF) may start
performing badly in the changing technological environment. The company is
currently struggling to remain afloat amongst deteriorating economic milieu in
Europe. Similarly, France Telecom (NASDAQ: FTE) is also facing regulatory
issues in Europe and its home country, France. However, these companies are
looking to pump up their infrastructure and are making capital outlays for
this purpose. These steps are likely to bring respite to their stock prices.
StockCall analysts have recently posted complimentary reports on Telefonica
and France Telecom. Sign up now to download these technical analyses at
http://www.stockcall.com/register 

Telefonica SA Loses Market Share

Telefonica SA is mainly operational in Latin America and thus offers
diversification benefit to your portfolio. However, lately, the company has
not been performing up to mark. In 2012, the company not only lost market
share, but also had to resort to mass layoffs in order to contain costs. The
impact of these developments is clearly visible on its stock price. The
company margins are likely to remain under pressure due to continuing economic
weakness in European markets and globally. Sign up today to read our free
research on Telefonica at http://www.StockCall.com/TEF020613.pdf

Telefonica is largely the victim of constantly changing technological
environment in telecommunications sector. The company is still struggling to
get a foothold in internet and TV market. As a result, Telefonica reported
that it would not be paying any dividend in the near future. The company is
also struggling to keep up its margins as it currently has 9.6 percent net
margin, substantially lower than healthy net margin.

Telefonica's dividend cut is likely to help in reducing its debt costs. The
company also inked a new deal with Alcatel Lucent to overhaul its
infrastructure. However, Telefonica's fortune is largely dependent on Europe
making an economic turnaround.

Nonetheless, with new collaborations and cost containment, the company can
bring its margins on tracks, thereby giving a boost to its stock price.

France Telecom to Reduce Dividend Payment

France Telecom boasts of mouthwatering dividend yield of over 13 percent,
though the stock performed somewhat iffy during 2012. The company enjoys near
monopoly in its home market, France and it offers its services in 33 countries
globally. After the recent decline in share price value, the stock offers a
good entry point. Register now and download the complimentary technical
research on France Telecom at http://www.StockCall.com/FTE020613.pdf

France Telecom reported lower revenue for the third quarter and its future
outlook remains conservative, mainly due to regulatory uncertainties in
Europe. The company is also under investigation in France for its alleged
collusion with France's ex finance minister Christine Lagarde. Other area of
concern for France Telecom is the constant decline in call termination rates
in various countries including Spain.

France Telecom stock is currently trading at P/E ratio of 5.92, significantly
discounted in comparison to the industry average of 9.9. Though, it currently
commands good dividend yield, the company is looking to reduce its dividends
in order to reduce its debt burden. This step may render the stock
unattractive for a while but in the long-run, the results are expected to be
positive for the company and its stock. France Telecom is also looking to make
capital expenditure in order to overhaul its operations.

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