For most investors looking to gain exposure to 5G technology, looking at some of the future fundamentals related to carriers which hold oligopolies in Canada and the U.S. is one way to go - that’s an article for another day.
In my opinion, however, a smarter way to play this sector is to look at the technology and infrastructure underpinning this revolution, as this is where I see long-term value today.
One of the largest providers of cellular tower infrastructure in North America is American Tower Corp. (NYSE:AMT), a company I have liked for quite some time in this space. If you think about it, wireless carriers will be spending big dollars to revamp infrastructure related to 5G (billions of dollars), with companies like American Tower really being the beneficiaries here.
The margins for infrastructure companies are very different from carriers in the sense that once a cellular/wireless tower is erected, adding on multiple carriers to the same tower essentially has zero cost, providing very wide margins (potentially) down the road as carriers scramble to have the best wireless coverage.
American Tower has experienced multiple expansions, like most of it peers of late, making this a company which is approaching fair value today in my opinion. That said, I do think American Tower represents great long-term value for conservative investors looking to build a stable portfolio to last decades, so I would recommend buying on any dips moving forward.
If we do end up getting a recession or bear market in the coming year, this is a company I would definitely load up on.
Invest wisely, my friends.
