On a recent segment of CNBC’s “Mad Money” program, analyst Jim Cramer noted how the 5G buzz has energized tower stocks. “When you see a group rally on an ugly day, wow, you might want to check what’s driving the strength,” Cramer commented. “The cell tower stocks are in raging bull market mode, with the coming build-out of 5G giving them an extra catalyst.”
The nation’s conversion to 5G technology has created a demand for wireless technology and companies like American Tower, SBA Communications, and Crown Castle are benefiting. A mistrust of Chinese manufacturers like Huawei and ZTE has also added to the demand for American produced products.
“Once you build a tower, you can just add another antenna to it when you pick up a new client, so the margins are terrific,” Cramer said. With 41,000 sites in the United States, and 130,000 worldwide, American Tower is well positioned to keep growing. As “Mad Money” noted “the stock price keeps rising faster than they can keep up.”
Crown Castle, however, was singled out as Cramer’s favorite. The company specialized in small cell development rather than full fledged towers and the market for their booster boxes will only keep getting bigger. “Put it all together, and you’ve got a stock that was practically tailor-made for this moment,” he said. “Plus, Crown Castle has a bountiful 3.5% yield, which is nothing to sneeze at.”
May 29, 2019