CHICAGO, Feb. 13, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Crown Castle International (NYSE:CCI-Free Report), T-Mobile USA (NYSE:TMUS-Free Report), AT&T Inc. (NYSE:T-Free Report), Arris Enterprises, Inc. (Nasdaq:ARRS-Free Report) and SBA Communications Corp. (Nasdaq:SBAC-Free Report).
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Today, Zacks is promoting its 'Buy' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday's Analyst Blog:
Crown Castle Upped to Outperform
On Feb 11, 2014, we upgraded our recommendation on Crown Castle International (NYSE:CCI-Free Report) to Outperform from Neutral.
Why the Upgrade?
An extensive tower portfolio, successful integration of T-Mobile business, expansion of Small Cell business, increased usage of smartphones, and aggressive deployment of 4GLTE networks are likely to spur growth moving ahead. Moreover, the proposed launch of Verizon's VoLTE service and continuous acquisitions of towers globally may further drive growth for the company.
Detailed Analysis
Higher usage of smartphones and tablets and increased deployment of 4G LTE networks have propelled demand for tower requirement by large carriers. Moreover, the acquisition of NextG Networks Inc. (which comprises 7,000 Distributed Antenna Systems) and the purchase of 7,200 wireless towers from T-Mobile USA (NYSE:TMUS-Free Report) have positioned Crown Castle as the largest wireless tower operator in the U.S.
Furthermore, the company has entered into a definitive agreement with telecom giant AT&T Inc. (NYSE:T-Free Report) to acquire exclusive rights of 9,700 wireless towers of the latter for a total consideration of $4.85 billion.
As transporting equipment from one tower to another is cumbersome, carriers normally renew contracts upon expiration. This implies that a high percentage of Crown Castle's revenue is recurring.
Recently, the company has converted its tower business into a Real Estate Investment Trust (REIT). An REIT status will benefit the company in terms of tax savings and enhance long-term shareholders wealth. Moreover, it will minimize the weighted average cost of capital (WACC). Following the conversion, Crown Castle will distribute 90% of its earnings through dividends every year, reducing tax.
Crown Castle currently carries a Zacks Rank #1 (Strong Buy).
Stocks That Warrant a Look
Other stocks in this sector like Arris Enterprises, Inc. (Nasdaq:ARRS-Free Report) and SBA Communications Corp. (Nasdaq:SBAC-Free Report) are set to gain from the robust growth of LTE deployment in the upcoming days. Arris carries a Zacks Rank #1 (Strong Buy) while the other two carries a Zacks Rank #2 (Buy).
Today, Zacks is promoting its 'Buy' stock recommendations. Get #1Stock of the Day pick for free.
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