SBA May Soar in Cell-Phone Towers
Investment manager David Burshtan is in a constant battle to beat the market with the 60-odd small-cap stocks that he steers at Northern Trust's Institutional Asset Management, in Chicago. He likes to single out obscure, little-known companies growing at 25% to 35% a year that he believes could double in 12 to 18 months. His latest pick: SBA Communications (SBAC), which owns and operates wireless communications towers that are leased to a variety of wireless providers.
''SBA is the fastest-growing tower company in terms of actual tower development and EBITDA [earnings before interest, taxes, depreciation, and amortization],'' says Burshtan. With just 500 towers in 1998, SBA is expected to own 2,400 by 2001, he says.
''SBA is one of the most attractive stocks in our tower universe,'' says John Bensche, an analyst at Lehman Brothers, who expects the stock, currently trading at 12, to hit 19 by the end of 2000. He expects revenues of $115.7 million and EBITDA of $29.5 million for 2000, and $143 million and EBITDA of $58 million in 2001, vs. 1999 estimated revenues of $84 million and EBITDA of $9.6 million.
Burshtan says that SBA has been transforming itself from a [tower] site-developing company, with profit margins of about 20%, into a site-owning company that produces margins of 85%. |
