Here's Why Investors Should Retain Crown Castle (CCI) Stock

On Aug 28, we issued an updated research report on Crown Castle International Corp. (NYSE:CCI) , a leading wireless communication tower operator in the United States.

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

On Jun 26, 2017 Crown Castle finally completed the acquisition of privately-held Wilcon Holdings LLC. With this buyout, Crown Castle will attain ownership rights of over 28,000 route miles of fiber. The company’s ongoing effort to reposition itself as a fiber provider (focused on small cell opportunity) from being a tower company looks impressive. In the last few years, it has purchased three fiber operators – FPL FiberNet Holdings, LLC (in January 2017), Quanta Fiber (called Sunesys, in April 2015) and 24/7 Mid-Atlantic Network (in September 2014).

The deployment of 5G network should also drive growth of the company’s tower and small cell assets as the wireless carriers look to expand and enhance their networks.

Crown Castle’s extensive tower portfolio, increased demand for infrastructure, strong business outlook, healthy leasing activity, continued acquisition of towers and growing demand for mobile broadband have been major positives for its expansion prospects. Wireless services are gaining ground based on technological advancements and network upgrade.

Majority of the infrastructure and upgrades require effective site management. Crown Castle capitalizes on this opportunity as over 90% of its quarterly revenues come from wireless service providers like Verizon Communications Inc. (NYSE:VZ) , AT&T Inc. (NYSE:T) and T-Mobile US Inc. (NYSE:T) .

The company has acquired 9,700 wireless towers from AT&T and taken over 7,200 wireless towers of T-Mobile US.

Shares of Crown Castle have outperformed the industry’s gain in the past three months. The stock has added 4.1% outshining the industry's gain of 0.8%.

However, the company’s continuous operation in a consolidated wireless industry has reduced demand for cell tower deployment and consequently is expected to dent the top line considerably. New technologies have reduced demand for site leases.

CrownCastle is exposed to foreign currency exchange rate risk due to its expansive international presence. High customer concentration also remains a concern.

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