Telecom: Favor the Towers (AMT, CCI, SBAC)

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David Evanson and Greg Miller, Spring, 2012

Recommending that investors take advantage of tower stocks, Canaccord Genuity telecom analyst Greg Miller said his favorites are American Tower (AMT – BUY, $72 target), Crown Castle (CCI – BUY, $63 target) and SBA Communications (SBAC – BUY, $60 target). Mr. Miller said:

“We believe the deployment of 4G LTE nationwide by all four major carriers in addition to the continued upgrade activity of Sprint and T-MobileUSA will continue to benefit the three publicly traded tower companies over the next few years.”

He added, “Some remain concerned that wireless consolidation could result in disruptive activities similar to when AT&T announced it would merge with T-MobileUSA (albeit smaller scale). We do not believe there is significant risk to the towers from the increasingly speculated M&A activity. Given that a T-MoUSA – Sprint deal now appears highly unlikely and with minimal overlap for the others, we believe the risk to the tower stocks is minimal.”