A Post-Thanksgiving Helping of Turkey and Locking in a Pair of Triple-Digit Gains

Turkcell is Turkey’s leading cell phone operator. In 2000, Turkcell became the first Turkish company quoted on the New York Stock Exchange (NYSE). With 34.8 million subscribers, Turkcell is big. It already stands as the third-biggest GSM operator in Europe and it recently leapfrogged Akbank, a local financial group, to become Turkey’s biggest company by market value. Turkcell also boasts a diverse international shareholder base that includes Nordic telecommunications company TeliaSonera, Russian private equity firm Altimo and unlisted Turkish conglomerate Cukurova.

Turkcell also is present in its surrounding markets. It has operations in the Ukraine, which recently posted profits for the first time. Turkcell also has operations in Central Asia and expects to increase its stake in its Fintur unit, which has mobile-phone networks in Kazakhstan, Georgia, Azerbaijan and Moldova.

Turkcell’s recent financial results reflect the success of its strategy and expansion. It recently announced that its third-quarter profit jumped 29% to $401.2 million on the back of a 44% rise in revenue. Backed up by both new subscriber additions and higher spending levels of existing subscribers, earnings before interest, tax, depreciation and amortization (EBITDA) rose 62% to $771.5 million. The subscriber base grew 13% and average revenue per user (ARPU) rose 26% to $15.3 due to a combination of a stronger lira (the Turkish currency) and price hikes. The company added one million mobile-phone customers in Q3 alone and management said it expects "double-digit" percentage revenue growth in lira terms next year. Given the lira’s appreciation against the dollar, that could translate into even higher growth in dollar terms. The company also has announced that it may repurchase shares and increase its dividend for this year, which should also support its stock price.

So buy Turkcell (TKC) at market today and set your stop at $19.50. Buy the April $25 call options (TKCDE.X) for even bigger upside. A word of warning. Turkey is a volatile market, and Turkcell is a volatile stock. It has moved as much as 11% in a single day in recent trading.

PORTFOLIO UPDATE

With your Vimpelcom options (VIQAY.X) nearing expiration, take the remaining profits of 123.08% here. But hold on to the stock for now, as this is the time of year when Vimpelcom tends to shine. We may get into some other options later. And with Mechel’s stock price soaring close to 10% on Friday, it’s a good time to lock in profits of 103.13% in half of your April $80 call options (MTLDP.X).