American Tower (AMT) – Strong Results and REIT coming

November 1, 2011

American Tower Corp (AMT) owns and operates wireless communication broadcast towers here in the United States. The towers service a number of industries including cellular, paging, and network services. American Tower has been a controversial stock with a high valuation – but enormous potential.  The company is rather leveraged at 4.5x debt-to-ebitda so small swings in results can lead to very big swings in the stock price.

The company had very strong site leasing revenues and relatively balanced growth. AMT  had strong revenues across carriers and conversion towards a REIT looks on trade for early 2012. There will be a shareholder vote on November 11th to approve the REIT status which will come with a large dividend in December 2011. The company has also been buying back shares aggressively. Given all the uncertainty around technology and carrier wars the tower operators provide exposure to the growth in cellular and smart phones while also providing financial leverage to growth in the industry. American Tower’s technicals are also quite good hitting a new high in a tough market.

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