Insider buying can provide investors with valuable clues in regards to a stock’s potential. Insiders sell their company stock for a variety of reasons. But they only buy company stock for one reason – they expect it to go up in value.
Here, we are going to highlight insider buying at Crown Castle International Corp (CCI:US) Crown Castle International is a real estate investment trust focused on communications infrastructure in the US. The company is the largest in its field in the US and owns, leases and operates over 40,000 cell towers and around 80,000 route miles of fiber. It therefore has a presence across all the major markets in the US and plays a key role in ensuring businesses and individuals have access to data, technology, and wireless services. It’s traded on the New York Stock Exchange and currently has a market capitalization of $83.46 billion.
Crown Castle International Corp: Insider Buying
Form 4 filings show that on 26 July, the Independent Chairman of the Board at Crown Castle International, J Martin, purchased 11,200 CCI shares at a price of $191.51 per share. This purchase cost the insider approximately $2.15 million.
This insider transaction caught our attention given its large size. Our data shows that this was the largest insider transaction during the past twelve months. The size of the trade suggests that the insider is extremely confident in the future prospects of the company.
It’s worth noting that Mr. Martin is a veteran real estate investor who often shares his advice on real estate investments publicly. He founded private equity firm Platte River Equity and is the Chairman & Managing Director. This background means that he is likely to have a good read on the stock.
Q2 Beats Expectations
Crown Castle International produced an impressive set of Q2 numbers which led to the outlook for the full year being raised. A robust 5G leasing environment played a big part in driving growth.
For the quarter, site revenue rental revenues grew 8% versus Q2 2020 to $1.425 billion while adjusted EBITDA rose by 15% to $958 million. Adjusted funds from operations in Q2 were $741 million which was an increase of 22% on the year prior. The outlook for adjusted funds from operations per share was raised from $6.78 per share to $6.89 per share, an increase of 12%.
“The elevated level of Towers activity this year is contributing to an expected 12% growth in AFFO per share, meaningfully exceeding our long-term target of 7% to 8% per year. Looking forward, we believe we are in a great position to deliver on our growth target while at the same time making investments in our business that we believe will generate attractive long-term returns and support future growth,” said Dan Schlanger, the Chief Financial Officer.
Given these impressive Q2 numbers and confident outlook, we see the recent insider buying as bullish. It suggests that Mr. Martin believes the momentum in the business will continue and the shares are undervalued by the market.