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

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Forbes.com, Spring, 2012. This article was placed on behalf of the U.S. based equity research effort of institutional broker and investment bank Canaccord Genuity. It was part of a series of articles developed under an agreement with forbes.com to work with a variety of contributors and assist them in delivering actionable investment ideas each week. The site, forbes.com is one of the top 500 sites in the world with nearly 10 million subscribers and approximately 100 million page views a month.

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.”