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Crown Castle International Corp. Message Board

  • Nemesis_editors Nemesis_editors Apr 26, 2012 7:58 PM Flag

    With a PE of 108, why invest here?

    Can anybody explain why anyone is investing in a company with such a high PE? Are the earnings growing super fast? What's the reason please...

    I don't follow this company, but I took notice cause it's been added to the SP 500 and I invest in that.

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    • PE? You need to start learning more about companies. High PEs can actually mean that a stock is set to rise because people are expecting higher earnings in the future. as for CCI, it is basically a REIT and PE is meaningless. You need to look at cash flow and debt service coverage. Eventually, CCI needs to kick out a major dividend.

      • 1 Reply to originalbaked
      • It's also helpful to know something about the tax code. As long as CCI can shelter income from taxes they'll continue to be a C corp, which lets them invest the cash flow in growth and stock buybacks. When the management team no longer sees growth opportunities, CCI would convert to a REIT, like AMT did. Of course, then the team runs the risk (like Global Signal years ago) that a growth oriented C corp could buy them out.

 
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