Cell tower real estate investment trusts (Reits) have become a safe-haven investment in the COVID-19 of the time thanks to their constant price performance and of the crucial importance of the nation during the deployment of the 5G. In addition, near historically low interest rates make this group an attractive alternative to low yielding bonds and reduce borrowing costs for companies seeking to develop and/or upgrade their infrastructure.
Oppenheimer analyst Timothy Horan expects U.S. wireless industry capital expenditures to top $42 billion by 2021, from $30 billion in recent years. “5G upgrades and densification of 4G network, will likely be a long cycle that provides a solid tour of the business visibility for the next few years,” Horan says Barron’s.
Interestingly, the three cell tower Reits, as described below, all moved sharply higher Friday on volume above the average without that is said to be controlled by the catalyst. Let’s look at each company in more detail and work through several ideas of transaction.
American Tower Corporation (AMT)
With a market capitalization of $117.74 billion, American Tower Corporation (AMT), dubbed “America 5G Owner” – owns and operates more than 40 000 cell phone towers in the united States, as well as others in Latin America, Europe and India. In the midst of declining interest rates, the trust shares trade at a 3% spread above the 10-year Treasury, making them reasonably assessed, according to Horan. American Tower stock has gained 16.52% year-to-date (YTD), outperforming specialty REITS industry average during the same period of nearly 5% from the June 22, 2020.
During the month of June, American Tower stock has consolidated above the prominent February and April swing highs now provide a crucial support level. Although the price is slightly below its all-time high, the balance volume (OBV) indicator, multi-month, on the Friday, indicating that the stock may be ready to break above this important resistance level. Those who enter here must place an initial stop below the June low at $250.02 and consider using a trailing stop, 20-day moving average, to ride the trend as far as possible.
Crown Castle International Corp (CCI)
Crown Castle International Corp (CCI), which has nearly 40 000 cell phone towers across the united States, the rental of space on its infrastructure for wireless service providers. Horan notes that the Boston-based company plans on the deployment of more small-cell radio transmitters for mobile telephony services) that carry additional data to accommodate the networks 5G. As of June 22, 2020 Crown Castle stock has a market value of $71.04 billion, offers a 2.9% dividend yield, and trades at more than 20% year-on-year.
The stock has formed a pennant pattern over the last three weeks above a support zone between $160 and $165. On Friday, the turnover marked the highest volume since mid-March, suggests that the interest of institutional investors in the stock. Swing traders who open a long position at these levels should place an initial stop order below the 50-day simple moving average (SMA) and the lift under each higher swing low to let profits run.
SBA Communications Corporation (SBAC)
SBA Communications Corporation (SBAC) owns and operates wireless communications infrastructure, including towers, distributed antenna systems (DAS) and small cells across the Americas and South Africa. Earlier this month, analyst from JPMorgan Philip Cusick upgraded SBA Communications stock to “Neutral” to “Overweight,” saying that the company is under-evaluated within the macro business which should help it to grow faster than its rivals. SBA Communications shares have returned 25.83% YTD and 23.51% over the last three months. Investors also receive a 0.62% dividend yield.
The bulls have used the 50-day SMA as a support line during the months of June and July, the purchase of dives each time the price tests closely watched indicator. The same pattern played out in the session of Friday, with the retest occurring on the heaviest volume since August 2018. Those who anticipate a continuation of the growth dynamic should set a profit target by measuring the distance between the top and the bottom of the recent two months of trading ($40) and adding that amount to the price of entry. Protect the capital by cutting losses if the price closes below the June 18 low at $288.60.