American Tower (AMT): Benefiting from the smart phone market

By Elyse Andrews, Editor of Cabot Wealth Advisory
From Cabot Wealth Advisory 7/17/10 Sign up for free Cabot Wealth Advisory e-newsletter

Today, I’m going to recommend a stock that’s a beneficiary of the smart phone market, but doesn’t actually make any phones or any of the components in them.

The company is American Tower (AMT) and although it’s based in Boston, it has a wide presence in the U.S. and around the world. It was recently recommended by Cabot Top Ten Weekly Editor Michael Cintolo, who wrote:

“The iPhones, Blackberries, flip phones and candy-bar cell phones of the world share one big requirement: They all need cell phone towers to get their signals. And the continuing competition among the world’s cellular service providers to extend and upgrade their networks is the ruling reason behind the success of American Tower. Massachusetts-based American Tower has a global portfolio of about 30,000 wireless and broadcast communication sites, with more being developed all the time. These sites range from mountain tops to rooftops, and stretch across the U.S., Mexico, Brazil and India. The company has just announced that it will begin operations in Chile soon, having just inked a deal to acquire up to 287 tower sites from Telefonica Chile. Revenue growth is rising at an increasing rate (up from 10% in Q4 to 12% in Q1) and earnings were up a notable 72% in the most recent quarter. With a customer base that includes AT&T, Sprint Nextel, Verizon Wireless and T-Mobile, American Tower is benefiting from the boom in the wireless sector.

“AMT isn’t a rocket shot, but the stock is pushing out into multi-year highs. The stock declined in an orderly way from its January high of 45 to support at 38 in May, then staged a strong rally back to 46, completing a cup pattern. A two-week correction to 43 put a handle on the cup and the stock then soared to 47 on good volume. The stock has now corrected to support at 46. AMT is liquid, and a little sideways action would make a good buying opportunity.”

For more details on American Tower and other top stocks, click here.

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Elyse AndrewsElyse Andrews
Editor of Cabot Wealth Advisory

Elyse Andrews edits Cabot Wealth Advisory, a free email newsletter that offers independent, no-nonsense investment advice on how to build long-lasting wealth written by Cabot’s analysts and editors. Every Saturday, Elyse writes the Weekend Digest, which includes her column and a summary of Cabot Wealth Advisories that readers may have missed during the week. Elyse is also a regular contributor to The Iconoclast Investor, a blog for Cabot editors and readers to share their views and interact with each other.

Company Details

American Tower (AMT)
116 Huntington Avenue
11th Floor
Boston, Massachusetts 02116
Index Membership: N/A
Sector: Technology
Industry: Diversified Communication Services
Full Time Employees: 1,420