Aristotle Atlantic Partners, an investment management firm, released its “Aristotle Atlantic Value Equity Fund” second quarter 2023 investor letter, a copy of which can be downloaded here. For the second quarter of 2023, Aristotle Capital’s Value Equity Composite posted a total return of 4.56% gross of fees (4.51% net of fees), outperforming the 4.07% return of the Russell 1000 Value Index and underperforming the 8.74% return of the S&P 500 Index. Spare some time to check the fund’s top 5 holdings to know more about their top bets for 2023.
In its Q2 2023 investor letter, Aristotle Value Equity mentioned Crown Castle Inc. (NYSE:CCI) and explained its insights for the company. Founded in 1994, Crown Castle Inc. (NYSE:CCI) is a Houston, Texas-based real estate investment trust and shared communications infrastructure provider with a $46.4 billion market capitalization. Crown Castle Inc. (NYSE:CCI) delivered a -21.11% return since the beginning of the year, while its 12-month returns are down by -40.01%. The stock closed at $107.00 per share on August 02, 2023.
Here is what Aristotle Value Equity has to say about Crown Castle Inc. (NYSE:CCI) in its Q2 2023 investor letter:
“Crown Castle, the largest U.S. provider of shared communications infrastructure—cell towers, small cells and fiber—was the largest detractor from performance. The company reported a decline in fiber revenue and a deceleration in tower sales growth during the quarter after record network spending by wireless carriers in 2022 (related to the ongoing rollout of 5G). We continue to appreciate the benefits of management’s differentiated strategy to remain 100% focused on the U.S. while many competitors have instead sought to expand their tower businessesinternationally. We believe Crown Castle’s approach delivers a compelling value proposition as the company’s customers seek to utilize shared infrastructure while making multi‐ billion‐dollar investments in spectrum assets. Although carriers have generally pulled back from network spending this year, we continue to find the structure of Crown Castle’s tower business attractive. This includes the ability to implement a nearly 3% annual price escalator on tower rental rates, the low capital investment needed to maintain its towers and sticky customers with an over 95% renewal rate over the last 5 years. Looking past the short‐term movements in demand, we believe that, over the long term, the company is well‐poised to gain market share and also improve its profitability as it increases the average number of tenants per tower. In addition, management reiterated it is on pace to deploy 10,000 small cell nodes in 2023 (approximately doubling last year’s results). As such, we view Crown Castle as uniquely positioned to benefit from the shift to 5G networks, since the company’s portfolio skews toward urban areas where densification of populations, infrastructure and networks enhances the value proposition of small cells.”
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Our calculations show that Crown Castle Inc. (NYSE:CCI) was not able to secure a spot on our list of the 30 Most Popular Stocks Among Hedge Funds. Crown Castle Inc. (NYSE:CCI) was in 43 hedge fund portfolios at the end of the second quarter of 2023, compared to 51 funds in the previous quarter. Crown Castle Inc. (NYSE:CCI) delivered a -9.01% return in the past 3 months.
We also discussed Crown Castle Inc. (NYSE:CCI) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters Q2 2023 page.
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Disclosure: None. This article is originally published at Insider Monkey.
