Group 1 - TIM SA, a Brazilian telecoms operator, is negotiating to repurchase a 51% interest in a fibre-network company it previously controlled [1] - The potential deal is valued at approximately $170 million [1]

Brazilian telecoms operator TIM SA is in talks to buy back a 51% stake in a fibre-network business it previously controlled under a deal that could be worth around $170 million, two people with knowle... ...

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: TIM S.A. Sponsored ADR (TIMB) - TIMB currently holds a Momentum Style Score of B, indicating potential as a solid momentum pick [3][12] - The company has a Zacks Rank of 2 (Buy), which is associated with strong historical outperformance [4] Performance Metrics - Over the past week, TIMB shares increased by 9.44%, outperforming the Zacks Wireless Non-US industry, which rose by 3.34% [6] - In a longer timeframe, TIMB's monthly price change is 15%, compared to the industry's 6.87% [6] - Over the last quarter, TIMB shares rose by 3.19%, and over the past year, they have surged by 83.11%, while the S&P 500 only increased by 2.92% and 14.29%, respectively [7] Trading Volume - TIMB's average 20-day trading volume is 449,053 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Outlook - In the past two months, two earnings estimates for TIMB have been revised upwards, increasing the consensus estimate from $1.52 to $1.56 [10] - For the next fiscal year, two estimates have also moved higher, with no downward revisions [10]

Core Viewpoint - TIM S.A. Sponsored ADR (TIMB) has experienced a significant decline of 12.5% over the past four weeks, but it is now positioned for a potential trend reversal as it is in oversold territory, supported by analysts predicting better earnings than previously expected [1]. Group 1: Technical Analysis - The Relative Strength Index (RSI) is a momentum oscillator that indicates whether a stock is oversold, with readings below 30 typically signaling this condition [2]. - TIMB's current RSI reading is 28.3, suggesting that the heavy selling pressure may be exhausting itself, indicating a potential trend reversal [5]. - RSI helps investors identify entry opportunities when a stock is undervalued due to unwarranted selling pressure [3]. Group 2: Fundamental Analysis - Analysts have raised earnings estimates for TIMB, with the consensus EPS estimate increasing by 2.6% over the last 30 days, which often correlates with price appreciation [7]. - TIMB holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating strong potential for a turnaround [8].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: TIM S.A. Sponsored ADR (TIMB) - TIMB currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The stock has a Zacks Rank of 1 (Strong Buy), suggesting a favorable outlook based on historical performance [3] Performance Metrics - Over the past week, TIMB shares increased by 2.31%, outperforming the Zacks Wireless Non-US industry, which rose by 1.36% [5] - In a longer timeframe, TIMB's monthly price change is 4.33%, compared to the industry's 1.77% [5] - Over the last quarter, TIMB shares have risen by 8.95%, and over the past year, they have increased by 62.13%, while the S&P 500 has only moved 3.76% and 14.96%, respectively [6] Trading Volume - TIMB's average 20-day trading volume is 433,489 shares, which serves as a baseline for price-to-volume analysis [7] Earnings Outlook - In the past two months, two earnings estimates for TIMB have been revised upwards, increasing the consensus estimate from $1.40 to $1.52 [9] - For the next fiscal year, one estimate has moved upwards with no downward revisions [9] Conclusion - Considering the strong performance metrics and positive earnings outlook, TIMB is positioned as a 1 (Strong Buy) stock with a Momentum Score of A, making it a potential candidate for near-term investment [11]

Industry Overview - The Zacks Wireless Non-US industry is facing challenges such as high capital expenditures for infrastructure upgrades, margin erosion, supply-chain disruptions, and geopolitical conflicts, but healthy demand trends in the digital age are expected to benefit the industry long-term [1][4] - The industry includes mobile telecommunications and broadband service providers that offer voice services, IoT solutions, content streaming, and various IT services [3] Current Challenges - Increased infrastructure spending has compromised short-term margins due to aggressive promotional expenses and a decline in linear TV subscribers, leading firms to diversify from legacy telecom services [4] - High raw material prices and geopolitical tensions have affected profitability, with price-sensitive competition expected to intensify [6] Future Prospects - Companies like América Móvil, Telia, and TIM are positioned to benefit from rising demand for scalable infrastructure and accelerated 5G deployment [2] - The industry has outperformed the S&P 500 and the broader Zacks Computer and Technology sector, gaining 43.1% over the past year compared to 16.3% and 27.3% respectively [9] Valuation Metrics - The industry has a trailing 12-month Price/Book ratio of 1.13X, significantly lower than the S&P 500's 8.33X and the sector's 10.31X [12] Notable Companies - **América Móvil**: Leading telecommunications provider in Latin America, with a 54.1% stock gain over the past year and a Zacks Rank 1 (Strong Buy) [15] - **Telia**: Provides mobile services in Northern Europe, with a 39.3% stock gain and a Zacks Rank 3 (Hold) [18] - **TIM**: Focused on 5G rollout in Brazil, with a 63% stock gain and a Zacks Rank 1 (Strong Buy) [20]

Core Points - Major European telecom companies are urging the European Commission to relax merger rules to boost investment in digital infrastructure and enhance competitiveness against US and Asian rivals [1] - The CEOs of Deutsche Telekom, Orange, Telefónica, TIM, Vodafone, Nokia, and Ericsson have expressed their concerns in a joint letter to the Commission President, highlighting the need for bold actions to address scale requirements [1] - The upcoming Digital Networks Act, expected to be proposed in November, aims to promote the development of digital infrastructure in Europe, but has faced internal opposition within the European Commission [1] Group 1 - European telecom companies are advocating for changes in merger regulations to facilitate investment [1] - The Digital Networks Act is seen as a critical opportunity for the industry to enhance competitiveness [1] - Internal opposition within the European Commission poses challenges to the proposed legislation [1]

Core Insights - The article emphasizes the focus on value investing in Asia, particularly in Hong Kong, targeting stocks with significant discrepancies between market price and intrinsic value [1] - It highlights two main categories of investment opportunities: deep value balance sheet bargains and wide moat stocks, which are characterized by their strong competitive advantages [1] Group 1: Investment Strategy - The research service aims to identify deep value balance sheet bargains, such as net cash stocks and low price-to-book (P/B) ratio stocks [1] - It also seeks wide moat stocks, which are high-quality businesses with sustainable competitive advantages, often referred to as "Magic Formula" stocks [1] Group 2: Market Focus - The primary focus is on the Asian equity market, with a particular emphasis on opportunities listed in Hong Kong [1] - The service provides monthly updates and watch lists to keep investors informed about potential investment opportunities [1]

Financial Data and Key Metrics Changes - The company achieved a 5.2% year-over-year increase in service revenues for the first nine months of 2025, with EBITDA rising 6.7% year-over-year and a net income increase of 42.2% year-over-year [4][5] - Operational cash flow reached BRL 4.5 billion, reflecting a disciplined approach to capital expenditures [4][14] - The company announced BRL 1.8 billion in interest on capital and repurchased BRL 369 million in shares, emphasizing its commitment to shareholder remuneration [5][13] Business Line Data and Key Metrics Changes - Mobile service revenues increased by 5.6% annually over nine months and 5.2% in the third quarter, driven by postpaid expansion [5] - The postpaid segment added 415,000 lines, with a low churn rate of 0.8%, while prepaid showed signs of stabilization [5][7] - Broadband ARPU was reported at BRL 94 in the third quarter, with a 3.7% year-over-year growth in the client base [7] Market Data and Key Metrics Changes - The company has expanded its 5G network to 1,000 cities across Brazil, maintaining leadership in download speed and network quality [7][8] - The competitive environment in mobile remains rational, with no significant disruptions from smaller players [26][56] Company Strategy and Development Direction - The company is focused on innovation, customer experience, and operational excellence to drive sustainable growth [4] - The B2B segment is a key aspect of the strategic plan, with a focus on expanding revenue streams through IoT solutions and partnerships, such as with Vale for TIM Smart Mining [10][11] - The company aims to maintain a disciplined approach to costs and leases while enhancing shareholder returns through buyback programs [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 goals and continuing to deliver value through strong performance in mobile postpaid and B2B segments [15] - The company anticipates a balanced growth strategy, with expectations for improvements in prepaid and broadband segments [15][19] Other Important Information - The company was recognized in the top 10 of the FTSE & Russell Diversity and Inclusion Index, highlighting its commitment to ESG practices [5] - The Revamp My Team app has over 17.7 million unique users, driving digital engagement and e-commerce growth [8][9] Q&A Session Summary Question: Mobile service revenues deceleration - Management noted that the deceleration in mobile service revenues is consistent with seasonal patterns and not primarily driven by competition, with a focus on maintaining postpaid growth [18][19] Question: Competitive environment and price adjustments - The competitive environment remains positive, with plans for potential price adjustments in the postpaid segment in the upcoming year [26][27] Question: Lease efficiency plan and partnerships - The company is in discussions with partners to enhance lease efficiency, aiming to keep lease costs stable while expanding coverage [30][33] Question: Fiber business and customer acquisition - Improvements in customer acquisition quality and churn management have contributed to positive net additions in the fiber business [39][40] Question: B2B and IoT growth opportunities - The company is focusing on specific verticals for B2B growth, with plans to expand its portfolio of solutions and enhance customer relationships [50][51] Question: Operating cash flow growth and revenue guidance - Management confirmed guidance for operating cash flow growth, emphasizing a stable competitive environment for mobile services [58][56] Question: Price increase magnitude and base affected - Price adjustments have been made for both control and pure postpaid customers, with further adjustments being assessed for the next year [64][65]

Financial Data and Key Metrics Changes - The company achieved a 5.2% year-over-year increase in service revenues for the first nine months of 2025, with EBITDA rising 6.7% year-over-year and a net income increase of 42.2% year-over-year [4][5] - Operational cash flow reached R$ 4.5 billion, with a disciplined approach to CapEx maintaining investment efficiency [4][14] - The company announced R$ 1.8 billion in interest on capital and repurchased R$ 369 million in shares, reinforcing its commitment to shareholder remuneration [5][13] Business Line Data and Key Metrics Changes - Mobile service revenues increased by 5.6% annually over nine months, with postpaid expansion being a key contributor [5] - The broadband segment showed operational improvements, with broadband ARPU at R$ 94 in the third quarter and a 3.7% year-over-year growth in the client base [7] - The B2B segment is expanding, with IoT solutions covering 23.5 million hectares and generating R$ 435 million in contracted revenues since Q1 2024 [10][11] Market Data and Key Metrics Changes - The company has the broadest 4G and 5G coverage in Brazil, with 5G now available in 1,000 cities [7] - The competitive environment in mobile remains rational, with no significant disruptions from smaller players [26] Company Strategy and Development Direction - The company is focused on innovation, customer experience, and operational excellence to drive sustainable growth [4] - The strategy includes a "more-for-more" approach to optimize the cost-benefit equation and enhance value propositions [6] - The company aims to maintain strong performance in mobile postpaid and B2B segments while continuing to recover prepaid and broadband [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 goals and delivering value through strong performance in mobile postpaid and B2B segments [15] - The company anticipates a stabilization in prepaid and broadband segments, with improvements expected in top-line growth [20] Other Important Information - The company reached the top 10 of the FTSE & Russell Diversity and Inclusion Index, highlighting its commitment to ESG practices [5] - The Revamp My Team app has over 17.7 million unique users, driving digital engagement and e-commerce growth [8] Q&A Session Summary Question: Mobile service revenues deceleration - Management noted that the deceleration in mobile service revenues is consistent with seasonal patterns and not heavily influenced by competition [18][19] Question: Competitive environment and price adjustments - The competitive environment remains positive, with plans for potential price adjustments in the postpaid segment next year [26][27] Question: Lease efficiency plan and partnerships - The company is in discussions with partners regarding lease efficiency, aiming to keep lease costs stable while expanding coverage [31][33] Question: Fiber business and customer acquisition - Improvements in customer acquisition quality and churn management have led to positive net additions in the fiber business [39][40] Question: B2B and IoT growth opportunities - The company is focusing on specific verticals for B2B growth, with ambitions to expand its portfolio of solutions [50][51] Question: Operating cash flow growth rate - Management confirmed guidance for operating cash flow growth, expecting it to align with previous forecasts [58][59] Question: Price increase magnitude and base affected - The company implemented price adjustments for both control and pure postpaid customers, with plans to explore further adjustments in the next quarter [64][65]