Supply chain disruptions are expected to stay with us for some time. One of the industries deeply affected by it is wireless communications infrastructure.
Incidentally, the chip shortage issue is presently overlapping with a lot of other headwinds coming in the way of the industry — high raw material prices, and Russia-Ukraine war-induced supply headwinds, to name a couple.
Furthermore, the need for infrastructure upgrades to support the ramped-up deployment of 5G is leading to a high amount of capital expenditures and, in turn, margin pressures.
Then again, growing demand for scalable infrastructure to accommodate better connectivity for the growing use of the Internet of Things (IoT) and 5G are expected to keep the communications infrastructure market quite in demand for the forthcoming years.
Uncertain times like these calls for guidance from experts on investors keen to invest in this sector for maximum benefits, keeping the risks in mind.
In today’s Expert Spotlight piece, we will talk about top Wall Street analyst Jonathan Atkin, who has been closely following and analyzing the closely related telecom services and communications infrastructure industries.
We believe that with most of his recommendations successful, Atkin’s stock opinions should be considered by investors before making investment decisions.
At the end of the article, we will also discuss a couple of the latest favorite stocks of Atkin.
Our Communications Infrastructure Expert
Atkins is the Global Head and Managing Director of Communications Infrastructure Investment Research at RBC Capital Markets. Among his achievements are a No. 1 ranking from Thomson Reuters in Telecom Services and Real Estate Equities, topmost ranking from the Wall Street Journal in Internet Services, and a similar ranking for Telecom Services sector from the Financial Times.
His rich professional experience began as an analyst in the U.S. Congress – Office of Technology Assessment in 1989 after graduating from Stanford University with an MS in Engineering. There onward, he worked with Daimler-Benz, Alex Brown, and TD Securities before joining RBC Capital Markets in 2000. Atkins also has an MBA from Columbia University.
This five-star rated analyst is ranked No. 7 among the 7,891 analysts on TipRanks, and No. 12 among 18,161 overall experts in the TipRanks universe.
The TipRanks Star Ranking system considers an expert’s success rate, the average returns on recommended stocks, and statistical significance (a measure that improves with the number of transactions or recommendations made by the expert).
The analyst has a success rate of 77%, with an average return of 16.4% over the past year. Furthermore, in the past year, his picks generated an alpha of 2.7% over the S&P 500 index performance.
Atkin’s most profitable stock recommendation has been Nextdc Limited (NXDCF) in the year between July 6, 2020 and July 6, 2021, during which, the stock had gained 82.4%.
Let’s look at two of the top picks that have helped Atkin generate benchmark-beating returns.
SBA Communications (NASDAQ: SBAC)
SBA Communications boasts extensive infrastructure assets, which are driving its growth. Acceleration in the deployment of 5G networks and burgeoning data volumes are prompting wireless carriers to expand and upgrade their networks, which in turn is boosting SBA Communications’ business.
Atkin recently maintained a Buy rating on the SBAC stock, with a price target of $382. His conviction on the stock is strong because 80% of his ratings on SBA Communications have been accurate. Moreover, the analyst’s average return per rating on SBAC has been almost 20%.
Wall Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 10 Buys, three Holds, and one Sell. The average SBAC price target is $384.93, indicating 13.1% upside from current price levels.
Crown Castle (NYSE: CCI)
Crown Castle contributes to the communications infrastructure market by owning, managing, and leasing over 40,000 communication cell towers, and about 80,000 route miles of fiber spread across the United States.
The ever-increasing usage of mobile data, wider spectrum availability, and growing network investments by wireless carriers to roll out 5G networks are expected to boost the demand for Crown Castle’s towers.
Last week, Atkin reiterated a Buy rating on the stock, with a price target of $202, soon after the company released better-than-expected fourth-quarter 2021 earnings. With more than half of his ratings on the CCI stock being profitable, one can take into account his analysis and convictions on the stock’s performance prospects.
Moreover, Wall Street is bullish on the stock, with a Strong Buy rating based on six unanimous Buys. The average CCI price target is $201, suggesting 16.7% upside potential from Friday’s price levels.
The communication infrastructure market awaits more headwinds this year, including the possibility of aggravated supply chain disruptions stemming from component shortages extending well into 2023.
In such an environment, investors must remain focused on the longer-term prospects and fundamentals of companies serving this market.
In this regard, looking at the past record, strong expertise, and rate of successful recommendations on communication infrastructure players, Atkin’s rating on these stocks appears to have firm ground.
One can refer TipRanks’ Expert Center, which compiles the recommendations and transaction activities of the world’s top finance experts, for the success of investment decisions.
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