We Expect SBA To Deliver Slow, Steady Growth

SBA Communications has been more cautious than its tower peers in pursuing acquisitions and investing in its business, helping it avoid overpaying for assets and generating somewhat stronger returns on capital. However, it has repurchased shares far more aggressively than others, often at inflated prices. We expect heavy repurchases to continue, but we also believe the stock is now trading at a reasonable valuation. In addition, we think SBA's deal to acquire towers from Millicom and build new sites for the carrier in Latin America will generate solid growth. We aren't yet willing to assume that SpaceX or another new US wireless entrant will generate significant revenue for SBA given the low return potential for this type of business, but this development would only present upside.