SBA Communications Corporation (SBAC), Oi SA (ADR) (OIBR): Buy These High Performing Companies This Month

On completion of this deal, Oi SA (ADR) (NYSE:OIBR) will sign a long-term agreement with SBA Communications Corporation (NASDAQ:SBAC) to lease and rent the antenna space required within these towers. This will help in meeting the rising smartphone demand in Latin America as the market continues to attract providers. Currently, there are approximately 1.15 tenants per tower, which is below the average of 1.5 tenants per tower in Latin America. This low tenant ratio and smartphone usage will generate further growth opportunity for Oi SA (ADR) (NYSE:OIBR) to attach more tenants in these towers.

The company’s site leasing segment is a major revenue driver contributing nearly 97% of its total revenue. This segment reported growth of 58% in the first quarter year-over-year. To continue to enhance its leasing revenue, it planned to upgrade its tower sites with 4G network. By now, it has upgraded 40% of its total sites and will upgrade 90,000 towers with 4G network by the end of 2014.

With the high demand for 4G network, its strong client base like Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T) will be shifting their networks towards 4G. This will Increase the companies site leasing revenue from $846 million in 2012 to $1.1 billion in 2013, followed by $1.2 billion in 2014.

Conclusion

With the strong opportunity available in the market, all the above companies are expanding to increase their market presence, leading towards higher profits. Hertz Global Holdings, Inc. (NYSE:HTZ) is taking cost-initiative methods and is expanding in off-airport business segment. It is also shifting from brick and mortar to video kiosks, furthering its cost-effective measures.

SBA Communications Corporation (NASDAQ:SBAC) and Oi SA (ADR) (NYSE:OIBR) are coming to an agreement for enhancing SBA’s presence in Brazil. Further, SBA is also converting its tower sites to 4G LTE, which is in huge demand, and will increase its site leasing segment. Therefore, in the long run all three companies will be strong performers and will continue to drive the shareholders return higher. So, I recommend a long term buy for all three companies.

The article Buy These High Performing Companies This Month originally appeared on Fool.com and is written by Shweta Dubey.

Shweta Dubey has no position in any stocks mentioned. The Motley Fool owns shares of Hertz Global Holdings. Shweta is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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