Mario Gabelli is Selling These 5 Stocks

2. American Tower Corporation (NYSE:AMT)

Number of Hedge Fund Holders: 61

American Tower Corporation (NYSE:AMT) is a global real estate investment trust based in Boston, Massachusetts. Mario Gabelli has held a long-term position in American Tower Corporation (NYSE:AMT), first buying shares of the company back in Q4 2016. In the second quarter of 2021, he owned 5,295 American Tower Corporation (NYSE:AMT) shares, worth $1.43 million, which he disposed of in Q3 2021. 

On January 21, Deutsche Bank analyst Matthew Niknam lowered the price target on American Tower Corporation (NYSE:AMT) to $288 from $295 and kept a Hold rating on the shares. In light of a 10%-15% pullback to start 2022, the analyst believes tower stocks “screen increasingly attractive.”

American Tower Corporation (NYSE:AMT) on December 16 declared a $1.39 per share quarterly dividend, which is a 6.1% increase from its prior dividend of $1.31. The dividend was paid on January 14, to shareholders of record on December 27. 

In Q3 2021, 61 hedge funds were bullish on American Tower Corporation (NYSE:AMT), with stakes totaling $4.4 billion, as compared to 55 funds in the prior quarter, holding stakes in American Tower Corporation (NYSE:AMT) worth $4.7 billion. Akre Capital Management held the leading stake in the company as of the third quarter, with more than 7 million shares valued at $1.85 billion. 

Here is what Qualivian Investment Partners has to say about American Tower Corporation (NYSE:AMT) in its Q3 2021 investor letter:

“What Attracts Us 

Superior Business:

• High barriers to entry resulting from low bargaining power of suppliers (land owners) and customers (wireless companies). Neither can find reasonable substitutes for existing cell towers. Combined with low possibility of disruption, this results in a business oligopoly and pricing power.
• Stable business with consistent high returns on equity, low maintenance capital required, and strong cash generation.

− Ten-year, non-cancelable contracts with built in pricing escalators and high renewal rates

− 1%-2% churn

Superior Reinvestment Opportunities:

• Strong growth for the foreseeable future due to increasing demand for wireless data usage, resulting in wireless carriers Capex equipment spend on existing and new towers.
• Low maintenance capital expenditure requirements; most of capital expenditure is for growth

Superior Management / Capital Allocation:

• Capital reinvested back in business has had returns well above cost of capital
• Company has purchased stock opportunistically…” (Click here to see the full text)