Why NII Holdings Shares Got Crushed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Latin American wireless carrier NII Holdings (NAS: NIHD) plummeted 18% today after its quarterly results came in well below Wall Street expectations.

So what: NII continues to add subscribers at a solid pace, but a disappointing bottom line -- earnings plunged a staggering 90% to $10.9 million -- reinforces fears over its long-term profitability. Rocketing costs continue to weigh heavily on margins -- operating margin narrowed to 11.5% from 16.9% -- suggesting that the competition in the space is only getting fiercer.

Now what: I'd cautiously look into this plunge as a possible buy-in opportunity. "We remain confident that the investments we are making in our business and our new networks will create value over the long-term by positioning NII to pursue a much broader group of customers," CFO Gokul Hemmady reassured investors. More important, with the stock now down a whopping 65% over the past year and trading at a forward P/E of 10, betting on that turnaround talk doesn't exactly come at a high price.

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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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