Stock of the week: American Tower (AMT)
Stock of the week: American Tower (AMT)
Sometimes, the most boring companies are the best investments. I’ll give a couple of examples.
Waste Management Inc (WM)
Evident by the name, Waste Management deals with the management… of waste. Over the past five years, they have returned over 120%. For reference, Facebook, a notorious growth stock, has returned around 170% in the same period.
Dominos Pizza (DPZ)
Known for their quick delivery and low prices, Dominos Pizza has been a staple in many countries (except Italy) as an alternative to your McDonalds and Subway. The stock has returned over 280% in the past five years.
However, the stock we’re talking about today is American Tower (AMT). Their primary business is the leasing of space of communication sites to wireless service and data providers, radio and television broadcast companies. Essentially, the 5G towers you see on plots of land – they own that and lease it to companies, such as AT&T, Verizon, Vodafone, etc.
American Tower is not exactly a stock – it’s called a Real Estate Investment Trust (or REITs, for short).
American Tower: Catalysts
With Coronavirus hampering stock prices across the world, interest has been put on business who can survive during the world’s various potential lockdowns. Much attention has been put on “work from home” stocks such as tech and delivery services such as Uber eats, Amazon, etc. However, not much love has been shown to stocks like American Tower. With customers such as AT&T, Verizon, and T-Mobile entering into long-term leases, the Trusts’ revenue base is not going anywhere anytime soon. Furthermore, these companies rely on American Tower to run their businesses – so their stickiness is an advantage during this period. Their business spans a lot of Asia, Europe, the Middle East, Africa, and Latin America with high operating margins.
Furthermore, they are perfectly positioned to take advantage of the 5G boom, possibly spurred by the new iPhones Apple release.
American Tower: Risks
In terms of their business, not much. They face little competitors to the point they kind of co-exist with each other. However, their stock is quite expensive, trading around 55 times, pushing its dividend yield down to around 1.9%.
American Tower: Conclusion
American Tower is a good stock (REIT) to own if you’re looking for a stable business at any point in an economy. I believe the intrinsic value of the leases has not gone down because of the Coronavirus. Not only that, with low-interest rates. AT&T will be more willing to take out more debt to invest in 5G, alongside US senators proposing around $1B USD in funding for 5G. Although the business is quite expensive stock wise, they’ve currently dropped from their all-time highs, making it a compelling buy.
…And that excuse is the devaluation of the dollar. Gold is not immune to fundamental events. However, recently has been sideways for the most part of two months.
We are 13 days away from the election. Many polls state that Biden is winning the votes – however that’s what happened in the 2016 election. With big banks citing a decline in the Dollar over a Biden win, what will happen to commodity currencies such as the Australian Dollar and the Canadian Dollar against the US Dollar?
In short, Elimination and Suppression can be categorized by “Hard and Fast” and “Low and Slow.” Elimination is akin to ripping the band-aid off, in which one hopes the intense pain is short and quick and can be over and done with. Suppression is akin to slowly ripping off the band-aid in hopes of spreading out the problem over time.
Black Bull Group Limited (trading name: BlackBull Markets) is a company registered and incorporated in New Zealand (NZBN 9429041417799) located at Level 22, 120 Albert Street, Auckland 1010. Black Bull Group Limited is a registered Financial Services Provider (FSP403326) and holds a Derivative Issuer Licence issued by the Financial Markets Authority.
Black Bull Group UK Limited is registered in United Kingdom, Company Number - 9556804. Payment clearing services provided by: Black Bull Group UK Limited (Company Number - 9556804) Address - 483 Green Lanes, London, Greater London, United Kingdom, N13 4BS
Risk Warning: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money you cannot afford to lose. You should make yourself aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any questions or concerns as to how a loss would affect your lifestyle.
Copyright © 2020 Black Bull Group Limited. All Rights Reserved.