Is Millicom International (TIGO) A Great Long-Term Investment?

Bonhoeffer Capital Management, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. A net return of -2.8% was recorded by the fund for the third quarter of 2021, compared to -0.7% and -2.5% returns of the MSCI World ex-US and the DFA International Small Cap Value Fund, respectively for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Bonhoeffer Capital Management, in its Q3 2021 investor letter, mentioned Millicom International Cellular S.A. (NASDAQ: TIGO) and discussed its stance on the firm. Millicom International Cellular S.A. is a Luxembourg, Luxembourg-based mobile telecommunications company with a $3.02 billion market capitalization. ASGN delivered a -22.54% return since the beginning of the year, while its 12-month returns are down by -23.81%. The stock closed at $30.04 per share on December 09, 2021.

Here is what Bonhoeffer Capital Management has to say about Millicom International Cellular S.A. in its Q3 2021 investor letter:

“Our broadcast TV franchises, leasing, building products distributors, and roll-on/roll-off (RORO) shipping fall into this category. One trend I’ve noted in these firms is growth creation through acquisitions which provide synergies and operational leverage associated with vertical and horizontal consolidation and the subsequent repurchasing of shares with debt. The increased cash flow is used to pay the debt and the process is repeated.

Millicom, this quarter’s case study, is a public LBO that has financed many of its investment opportunities with debt. The recently announced buyout of its Guatemalan JV partner illustrates this. The debt, when used in situations like this, has been paid down over time as Millicom generates a lot of free cash flow and can increase returns like leveraged rollups, as described below.”

Photo by Mika Baumeister on Unsplash

Based on our calculations, Millicom International Cellular S.A. (NASDAQ: TIGO) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. TIGO was in 7 hedge fund portfolios at the end of the third quarter of 2021. Millicom International Cellular S.A. (NASDAQ: TIGO) delivered a -20.63% return in the past 3 months.

Just last year, we shared another fund’s views on TIGO in another article. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.

Disclosure: None. This article is originally published at Insider Monkey.