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Hedge Funds’ Most-Favored REITs This Quarter

#4 Crown Castle International Corp (NYSE:CCI)

– Hedge Funds with Long Positions (as of December 31): 38

– Value of Hedge Funds’ Holdings (as of December 31): $1.69 Billion

As in the case of the previous REIT, the hedge fund sentiment towards Crown Castle International Corp (NYSE:CCI) declined in the final quarter of 2015. The number of funds tracked by Insider Monkey with stakes in the company dropped to 38 from 46 quarter-on-quarter. The REIT owns, operates and leases shared wireless infrastructure such as towers and rooftops, and small cell network supported by fiber. To be more specific, Crown Castle International owns and leases roughly 40,000 towers and 16,000 fiber miles in the United States, including Puerto Rico. In late February 2016, Deutsche Bank initiated coverage on the REIT with a ‘Buy’ rating and a price target of $98, saying that the wireless infrastructure operator represents “the ‘cleanest’ play on U.S. mobile infrastructure spending”. Deutsche Bank analysts suggest that Crown Castle’s nonexistent exposure to international markets simplifies its story, as well as “de-risks cash flows given the health and stability of the U.S. Wireless market”. The REIT pays out an annualized dividend of $3.54 per share, which marks a current dividend yield of 4.16%. Jacob Doft’s Highline Capital Management added a 1.88 million-share stake in Crown Castle International Corp (NYSE:CCI) to its portfolio during the final three months of 2015.

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#3 American Tower Corp (NYSE:AMT)

– Hedge Funds with Long Positions (as of December 31): 38

– Value of Hedge Funds’ Holdings (as of December 31): $2.50 Billion

The number of funds from our system bullish on American Tower Corp (NYSE:AMT) declined to 38 from 42 during the December quarter, whereas the value of their stakes increased to $2.50 billion from $2.35 billion quarter-on-quarter. American Tower is a real estate investment trust that owns, operates and develops multitenant communications real estate. The REIT’s business mainly involves leasing space on communications sites to wireless service providers, radio and television broadcast companies, among others. The REIT’s asset portfolio primarily includes towers and distributed antenna system networks. American Tower substantially expanded its portfolio last year, after Verizon Communications agreed to lease the rights to 11,324 communications towers and sell 165 towers to the REIT for approximately $5.06 billion in cash. As a result, the REIT’s U.S. property segment revenue, which accounts for 66% of total revenue, increased to $3.16 billion in 2015 from $2.64 billion in 2014. Earlier this week, American Tower announced that its Board declared a quarterly cash distribution of $0.51 per share. Philippe Laffont’s Coatue Management disclosed owning 2.63 million shares of American Tower Corp (NYSE:AMT) in its 13F for the fourth quarter.

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