Q: Hi Peter and Team: Over time I've been trying to make my portfolio as similar as possible to your model. Since I own two of the big Canadian telcos in a separate portfiolio, I've been looking for something else to fill the missing 5%. I recently looked at tower companies. These are interesting, in particular because the three biggest US tower companies are rated "buys" by Morningstar, with fair values larger that their market value. However, based on their fundamentals (via Morningstar) I'm not sure what their growth prospects are (dividents are small to zero). I've heard some hype to the effect that 4G network proliferation will push their prices up. Can you shed any light on this family of stocks, in particular, American Tower (AMT, US)? Also, it and some others are now REITs. Does this cause any complications for a Canadian resident?
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Investment Q&A
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Q: Hi Peter&5i: I have for some time now owned American Tower (AMT), on the thesis that owning the wireless infrastructure that everyone has no choice but to use is apt to be a pretty good gig. Also it gave me exposure to the American dollar through what I considered to be a blue-chip US large-cap. Within the last few days however Carson Block/Muddy Waters (remember Sinoforest?) released an exposé style report on AMT, concluding that it was close to double its defensible valuation. What do you think? I have been using it as a cornerstone holding. Would you trim it back before seeing how things shake out? Thanks!!