Although our April newsletter concentrated on Nokia and Blackberry within the scan list was another pair of promise: Crown Castle International (CCI) and SBA Communications (SBAC).
These are wireless tower companies relaying calls from handset makers like Nokia and Blackberry but untroubled by the software wars in that industry. Indeed, so long as the explosion of call and data usage due to tablets, phablets, cell phones and the roll out of 4G continues the happier they are.
The favourable environment has not gone unnoticed by the market. CCI, for example, sports a P/E of well over 100; and both firms are around 10 times sales. Heady valuations like that are one of the factors making relative value methods attractive.
How attractive depends largely on the set-up, financing and leverage. The trade is not as historically profitable as the NOK/BBRY analyzed in the newsletter. But is not too bad either:
