Each year, we take a look back in order to look ahead. We do this by industry, by trend, and ultimately by stock. Here's a closer look at American Tower (NYSE: AMT), Fool style.

Foolish facts


American Tower

CAPS rating  (out of 5) ***
Total ratings 592
Percent bulls 88.7%
Percent bears 11.3%
Bullish pitches 83 out of 98
Highest rated peers VimpelCom, Tutor Perini, Turkcell Iletisim Hizmetleri

Data current as of Dec. 28.

Fools can't decide whether love or loathe American Tower, which is quite literally in the business of building towers for transmission of wireless signals. AT&T (NYSE: T), Sprint Nextel (NYSE: S), and USA Mobility (Nasdaq: USMO) are among its customers here in the U.S., yet the real opportunity exists overseas.

"In an obvious growth sector, and doing business in emerging markets with large populations that will most likely use wireless as [their] main line of communications, [especially] in rural areas with little infrastructure," wrote Foolish investor cut4dough earlier this month.

Looking back to look forward

Judging by the year's big American Tower stories at Fool.com, bullish investors have had plenty to snort about:

Investors have been and are still correct to appreciate American Tower's growth ambitions, especially when it results in this sort of financial performance:

2009-2010 Quarterly Performance

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Revenue growth 9.7% 11.2% 11.0% 15.6%
Normalized net income growth 16.7% 34.5% 19.6% 37.7%
Gross margin 76.0% 76.6% 76.1% 76.0%
Return on capital 5.9% 5.9% 6.2% 6.7%

Source: Capital IQ, a division of Standard & Poor's.

And here's what analysts expect from this cash king over the next two years, according to data compiled by Capital IQ:

Capital IQ Estimates



Revenue estimate $2,270 million $2,470 million
Normalized profit per share estimate $1.13 $1.43

Source: Capital IQ, a division of Standard & Poor's. Data current as of Dec. 28.

Foolish outlook: bullish
Going by the Street's estimates, American Tower is on track to grow its per-share earnings by more than 50% over the next two years. So while I wouldn't consider any stock trading in excess of 50 times earnings cheap, I can understand why investors have bid up the price to current levels. International expansion creates the opportunity for outsized growth, and that's exactly what American Tower is positioned to deliver.

Now it's your turn to weigh in. What do you think of American Tower's prospects at current prices? Use the comment box below to explain your thinking. You can also rate American Tower in Motley Fool CAPS.

What will be next year's best stock? The Motley Fool has created a brand new free report called "The Motley Fool's Top Stock for 2011." In it, we reveal the little company set to profit from the broadband Internet expansion. Get instant access by clicking here – it's free.

Interested in more info on the stocks mentioned in this story? Add American Tower, AT&T, Sprint Nextel, USA Mobility, Crown Castle International, or SBA Communications to your watchlist.

American Tower is a Motley Fool Rule Breakers recommendation. Turkcell is a Motley Fool Income Investor pick. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is also on Twitter as @TheMotleyFool. When it comes to stocks, the Fool's disclosure policy is a lookie-loo.