5 Long-Term Stock Picks of Skylands Capital

4. Crown Castle International Corp. (NYSE:CCI)

Value of Skylands Capital‘s 13F Position: $43.7 million

Number of Hedge Fund Shareholders: 50

Crown Castle International Corp. (NYSE:CCI) has had a place in Skylands Capital’s portfolio since the second quarter of 2004, making it one of the firm’s three oldest holdings. CCI shares have gained 1,152% over the past 18 years. Hedge fund ownership of CCI hit a 6-year high in the first quarter, rising by 28% quarter-over-quarter.

Crown Castle International Corp. (NYSE:CCI) owns a network of more than 40,000 towers and 85,000 routes of fiber that it leases to wireless service providers. Its towers business continues to deliver impressive organic growth and requires minimal investment to maintain. On the other hand, its small cells division isn’t providing any value and is in fact dragging down the company’s return on invested capital, which currently sits at just 5.88%, while the company’s peers are generally above 10%.

The ClearBridge Investments Global Infrastructure Income Strategy noted that Crown Castle International Corp. (NYSE:CCI) was one of its biggest Q1 detractors, but remains bullish on the communications infrastructure sector, having this to say in its Q1 2022 investor letter:

“U.S. communications company Crown Castle International (NYSE:CCI) was the largest detractor from quarterly performance. Crown Castle is the leading independent owner and operator of wireless communications infrastructure in the U.S. with a portfolio of approximately 40,000 towers. The stock underperformed as, driven by rising interest rates, investors rotated away from defensive into more value-oriented sectors. Communications infrastructure remains attractive, however, as companies continue to deploy greater capital spend to support the strong tailwinds from 5G.”