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Timothy P. Dooling, CFA Tim Dooling, a Chartered Financial Analyst, has over 20 years of investment experience. Mr. Dooling has been actively managing equity and derivative portfolios since 2001. He has held Senior Analyst positions at Torrey Pines Capital Management, Avalon Capital, and Sempra... More
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Analytic Firepower
  • Femtocells Come Of Age.... 1 comment
    Feb 27, 2012 6:48 PM | about stocks: AMT, CCI, SBAC
    Very interesting stuff coming out of the Mobile World Congress in Barcelona, a host of market-ready femtocell products being marketed to carriers around the world.

    Do a google news search on "mobile world congress femtocell" and you'll see what I mean.....check out my earlier articles for links to deeper discussion of my opinion of these.

    Looking forward to reading the upcoming 10-K from American Tower (NYSE:AMT), the devil is likely in the details.

    It strikes me as odd how the cell tower industry has much equity value at all

    • Technology development is squarely at odds with the longevity of this industry. Today at MWC Freescale Semiconductor unveiled a "MacroCell-on-a-chip".
    • There is an enormous financial incentive for engineers to develop a means of getting more capacity out of existing spectrum. The answer they have developed is cell-splitting, i.e. putting more antennae between existing cells, this means femtocells.
    • Towers were a great business when they had networks who needed them and carriers needed tower companies with scale. This is no longer the case. There is very little barrier to entry in the cell tower business. This is evident in AMT's margins. Now there are inexpensive antennas that can be deployed easily..
    So why do people pay a high valuation for a debt-laden company with obsolete assets? I don't know. Wall St analysts do silly things like publish "Target Prices" because it is good for business. AMT does enormous business with Wall St banks. There is no better client of a bank than an acquisitive debt-issuer with foreign subsidiaries.....there is no fatter punter than AMT so it is only natural to expect these "analysts" to do what is good for their pockets, not yours.

    Several analysts this week have raised their "Target Price" of AMT while at the same time cutting earnings estimates. All it takes is a small adjustment to the DCF WACC, and poof....whatever price you want becomes seemingly justified.

    We'll see what the 10-K says soon......TD

    Disclosure: I am short AMT.

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  • rw1270
    , contributor
    Comments (379) | Send Message
     
    How is that short going for you? I sold AMT at low 60s after reading series of your articles. I saved myself embarrassment of 10 bucks of upside and very stable movement upward in times everything else was up and down.

     

    Sarcasm aside, it seems you've been short for couple of years now, your articles are basically alleging at least unethical, but suggesting even illegal activities by AMT. I'm still waiting for that bomb to go off, but it seems nothing is transpiring. India wa supposed to be a disaster, Africa was basically off the rails, the management is corrupt and possibly cooking the books. Are we seeing another Enron in the works, including everybody conspiring to hide the truth? So when will we see the blowup? Can the maintain the charade for years?
    7 Oct 2012, 09:11 PM Reply Like
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