O goodie, AMT got a little mention in Barron's
interactive.wsj.com
Jim Goff the manager of Janus Enterprise Fund:
...Two of his more interesting telecom
plays are American Tower and
Crown Castle, which together own
and operate the towers that carry
cellular signals in 90 of the top 100
markets in the U.S. They lease space
on their towers for transmitters to all
of the country's major wireless
providers. He's big on the tower
companies for a couple of reasons.
First, there's the scarcity value of the
towers. After all, most cities have
extremely tight zoning restrictions on
them, which means that competitors will have a hard time duplicating their
footprints. "The sites are kind of like garbage dumps. People know they're
important but they don't want them in their backyard," says Goff.
Second, the companies' both have great earnings potential. Consider
American Tower. The company is expanding its tower base significantly, and
the incremental margins on the towers it already owns -- that is, the money
that flows in when second, third and fourth transmitters are added to an
existing tower -- are 95%. "What's great about these guys is that you don't
have to bet on a single wireless technology, and you don't have to pick a
winning service provider: They win no matter what."
Goff thinks American Tower, which had earnings before interest, taxes,
depreciation and amortization of $24.8 million last year on revenues of $67.5
million in the third quarter, ending September 30, can increase "same tower"
EBITDA by 20% to 25% a year. Although the company's shares are trading
at 37, or a pricey 25 times this year's consensus EBITDA, he thinks the stock
could double in the next 12 months. As proof of his confidence in the
company, Goff says he's been buying more shares of American Tower
recently. |
