Enter American Tower (AMT) Says Cramer
CNBC’s Mad Money Jim Cramer suggested investors to buy American Tower (NYSE: AMT), a company that builds cell-phone towers and leases space on them to wireless firms. He expects between 12,000 and 15,000 new towers to be built in the near future because of the growing mobile Web industry and government stimulus that plans to finance around 2,200 projects. Cramer also thinks that there are big growth opportunities internationally for this company as it could enter Mexican, Brazilian, Indian and Chinese markets.
American Tower (AMT) CEO James Taiclet shares Cramer’s optimism for the sector. He was Cramer’s guest in Mad Money and said that more people want mobility while using their computers and other technological devices. Taiclet said that they have extremely high EBITDA margin of 70% and pointed that there are many benefits for wireless firms in using their services.
Taiclet explained that American Tower (AMT) is not currently expensive because they should be judged on cash flow instead net income. The company have to use 20 year period for depreciation and AMT’s depreciation expenses far exceed their capital expenditures which makes their net income lower than net cash flow and the most appropriate measure for this industry is free cash flow.
American Tower (AMT) was up on Wednesday trading around $35.5.
