REITS earning season begins this week and Arturo Neto, author of Heard on the REITs, believes there are opportunities to be had in REITs in all markets. From a recent interview in Seeking Alpha, Neto explained why American Tower has caught his eye.
“I like American Tower for two reasons,” Neto told Seeking Alpha, “Its focus on towers and its international growth prospects. During the interview, I mentioned American Tower as being at the epicenter of the massive amounts of investments going into 4G and 5G networks. What was missing from the commentary is that AMT’s focus on macro cells (towers) and its derivative benefits from investments in 4G is what makes it so compelling. Telecom carriers are still investing $30 billion annually on their networks, and most of that is still going into 4G. The 5G network will be a bigger driver for small cell technology and fiber, but that benefit is still out several years. That opportunity is being eyed by others right now,” Neto said.
“On the other hand,” he said “the push for 4G is massive in many international markets. Many people don’t realize that in many emerging market countries, the telecommunications infrastructure buildout process skipped many steps. Many countries never had landlines and never will. Why install telephone poles and run wires across an entire country when it can now be done with cell towers and WiFi? So, the growth of mobile demand internationally is also quite compelling, and the larger peers in the Infrastructure REIT sector are focused primarily on the U.S. market, not global.”
“That said, I hold AMT, Crown Castle International, and Uniti (NASDAQ:UNIT) in the portfolio, but I believe American Tower is best positioned for what’s happening in the industry right now,” Neto said. “It is the second-largest holding in the portfolio in the sector with the largest overweight. That might change as we approach the rollout of 5G, but for now there is still quite a bit of upside near term.”
October 18, 2017
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