The market is feeling the weight of a more than six year rally, and investors are hard pressed to find growth that equals current valuations. There is one segment that continues to plow ahead, year in and year out, with growth, revenues and a path forward that looks better than the path traveled.
A new report from Cowen points to the major factors that continue to drive demand in communications infrastructure, notably fiber and data centers. One key point they make is that demand is robust and very well-rounded, and that these assets will be relevant for generations to come. We screened the Cowen report for stocks rated Outperform and came up with four that serious aggressive growth investors may want to consider.
This top company printed an all-time high last November and has traded down to sideways for almost a year as it pushes back to that level. American Tower Corp. (NYSE: AMT) is one of the largest global real estate investment trusts (REITs). It is a leading independent owner, operator and developer of multi-tenant communications real estate with a portfolio of approximately 97,000 communications sites, and it is on track to own and operate 100,000 cell towers by the end of 2015, both U.S. and international operations. It is also reported that the company is already processing about 900 applications in its pipeline to add additional carriers to the newly acquired Verizon towers.
While the company reported strong organic growth of 9.5% in 2014, that is expected to slow back to a more normal 7% range as large carriers like AT&T pull back some spending and expansion. Even with the number coming more in line with usual growth, next year is expected to be the same or higher, and for a stock that traded sideways to down for the past year that could be a precursor to a breakout.
American Tower investors are paid a 1.75% dividend. The Cowen price target for the stock is $119. The Thomson/First Call consensus price target is $114.44. The shares closed Wednesday at $100.40.