June 23 2008 - American Tower Corp. (AMT-NYSE) is all about getting high. The tower management firm (formerly American Tower Systems) operates about 22,500 broadcast and communications towers in the US, Brazil, and Mexico. The company rents space on multi-tenant towers and rooftops to wireless carriers and radio and TV broadcasters.

You could have bought this stock at 80 cents a share in 2002. In 2000, it was going for $55.50. Since the low point, the price has only gone higher. It's not back to the peak of 2000, but the upward trend over the 6 years is unbroken as the stock pushes higher. Can it get back to, then go beyond, the old record?

With wireless communication's explosive growth, American Tower is offering the right service at the right time. The potential U.S. wireless market is about 80% filled with analysts predicting 100% saturation within a few years. Users now are talking more minutes or sending more data and information. And more usage requires better networks.

To help its customers, the 4 large telecoms are expected to spend between $25 billion to $30 billion a year in the next 3 to 5 years on their networks. The telecom with the best coverage will gain the most clients. That means more towers are needed, especially with a new spectrum for advanced third and fourth generation wireless products soon to be offered (the new iPhone works on the 3G platform which gives faster downloads and better performance).

That's just in the U.S. Foreign markets, such as Brazil and Mexico where the company already has towers, represent 15% of total sales and about 16% of operating income. Analysts estimate these 2 markets have penetration rates of 65%. Look for more towers in other Latin America countries as well as in Asia. The company just did a deal in India where the wireless market is only 20% penetrated. AMT in India will provide service from 200 celltowers.

Earnings have improved steadily since 2005 when the company reported its last deficit of 19 cents. In 2006, they went positive to 9 cents. Last year, they hit 29 cents. This year, analysts expect 47 cents and next year 68 cents. Sales were $944.9 million in 2005, went to $1.317 billion, followed by $1.456 billion. This year analysts predict $1.58 billion and next year $1.71 billion.

Other numbers: Market cap is $17.7 billion on 396.573 million shares. (With the company's strong cash flow, there may be a stock buyback program.....it has enough to build and/or acquire towers and support a buyback as well.). There is no dividend (another possible use for high cash flow). Current assets are equal to current liabilities. Net Profit Margin is 14.8%. Return on Equity is estimated to be 8% this year and 10% next year. An astronomical P/E of 327. A very high Price to Sales of 12.5.

This stock isn't cheap by any measure. But it is growing in all the right ways with numerous international markets still untouched. There's lots of growth potential here, and management has demonstrated it knows how to handle capital to exploit new markets.

- Company Web site: www.americantower.com

- Ted Allrich