American Tower (AMT)

REITs as a whole are having a tough time with rising interest rates. However, American Tower is one of the highest-growth REITs, performing well ahead of its peers. Own it for a rising dividend. It is not economically sensitive. AMT is great if you're looking for an income stream though the shares may not rocket higher. A good income-producing stock.

This has the cell towers and fiber-optic networks that are going through all US cities. He is more attracted to the bonds than to the stocks, because it is a highly leveraged company. They are on the edge of investment grade, so a downturn could hurt. Demand for speed and 5G is coming and is going to be an opportunity. If you want to go into a company like this, the volatility is going to be very high, so you only want to go in with a half position, and manage it over time.

Owns cell towers in the US. Did extremely well for quite a while. Believes it has big exposure in Mexico. As we move into 5G coverage, more and more cell towers are needed. The opportunity for these companies to put in more towers is huge. They are expensive stocks, but if you want pure growth where you can sleep well at night, this is one. Buy and hold, and you will be fine in the long run.

Basically cell phone towers sit on top of buildings and in the middle of fields, etc. When this was initially listed, it had a huge run and the market actually processed it as a REIT. With a rising yield, the valuation climbed, and the stock continued having a huge run. At these levels, the argument would be how much more money can you squeeze out of them. Start thinking about companies that spin the tower businesses out. The business is a very good business. Telcos have to pay them. Without them, you can't run a telco network. He wouldn't buy at these levels.

Has no real estate in his portfolio, but there are going to be a few names that have done well and will probably continue to do so, and this is such a company. All they do is sell cell phone towers. It gives you about a 2% dividend yield, which should be pretty safe and secure.

A bit of a complicated valuation exercise when you look at it, because it looks expensive on a price/earnings ratio, but really is not. It’s treated more like a real estate investment trust. The street looks at it on an adjusted funds from operations standpoint. When you look at it that way, it compares reasonably well against its major competitors. Growing very well internationally, but stumbling a little domestically. If you take a position, do it as part of a balanced portfolio. He wouldn’t put a lot of risk capital into it.

Although a REIT, it can generally be grouped into technology, which tends to do well from September until the end of the year. Average gain on a seasonal perspective is about 10%. Yesterday, this gapped higher. When you have these " gap moves higher", it acts as a point of support for any retracement. It pulled back today and is testing that level of support. That is a level you want to be shooting off of. If it trades below that, trim your positions and look to the less cyclical parts of the market. Right now, there is support at the 20-day moving average and the moving averages are still moving higher. There could be a slight retracement, but everything looks positive on a long-term basis.

American Tower (AMT-N), Crown Castle International (CCI-N) or SBA Communications (SBAC-Q)? US REITs that own cell towers. You want to own these because they have multiple tenants. The average tower has 3 or 4 tenants. They can put more and more gear on them, so there is lots of room to grow revenues. The US is going through a boom on bandwidth, certainly wireless spectrum. Of the 3, he prefers this, the most international of the group. About 60% of revenue comes from the US and the rest is international. Generates a lot of free cash flow, and is highly predictable because of 5 year contracts. As we move to 5G, there is going to be a whole bunch more gear getting loaded on these towers, allowing them to charge more rent. It doesn’t pay a big dividend, but it has grown 34% a year over the last 5 years.

He loves it, but it is too expensive for him. They took out the number 2 tower company in India. If we got a pullback it would be one of those companies at the top of his list to add to. When the street loves a stock you should sell it. Then we can get in.

A REIT which owns cell phone towers all over the world. Cell phone towers are pretty interesting REITs as they have almost unlimited capacity. They have all the major wireless providers as customers, putting their gear up on their towers. Every time there is a new generation of gear, they don’t take the old stuff off, but put the new one on, so rents keep going up. They’ve done a great job of growing geographically. Has a broad customer base and isn’t levered to any one mobility provider. Over the next couple of years, we are going to start seeing 5G LTE coming, the next generation of wireless gear. They’ll continue to grow their dividend.

They have exposure into India. It is an expensive stock with a low dividend (~2%). He sold it earlier this year. He would not short it.