Vodafone is in

Vodafone is one of the companies that I cited as one potential investment. Today I decided that they are in. Debt seems to be ok, with most of it (12 billion) are long term and 7 billion out more than 5 years. Free cash flow has been growing steadily from 2002 to 2004 from 2.4 to 5.2 to 8.5 billion pounds. This is more than enough to cover their debt. Free cash flow is expected at 7 billion in 2004 but I suspect less goodwill amortization. They are buying back high priced bonds replacing them with cheaper ones, improving their cost of captial. They are trading below book value and growing revenue steadily, over 30% in the last year. They are doing this by adding subscribers and increasing their non-voice revenue and ARPU in some countries. Yahoo! also cites their enterprise value to be above their market cap and I don’t really see them going down, so that’s a good chance going in. On top of that, only 6.7% of the shares are held by institutions, meaning that once the mobile bandwagon starts roling back in, they will jump back on. I do see an opportunity here and will add to my position.