Topic: Growth Stocks

ATLANTIC TELE-NETWORK $74.34 – Nasdaq symbol ATNI

ATLANTIC TELE-NETWORK $74.34 (Nasdaq symbol ATNI; TSINetwork Rating: Speculative) (340- 777-8000; www.atni.com; Shares outstanding: 16.0 million; Market cap: $1.2 billion; Dividend yield: 1.6%) owns wireless and wireline (traditional telephone and Internet) operations in the U.S. Southwest, New England, New York State, Guyana, Bermuda and parts of the Caribbean islands.

The company continues to expand its wireless capacity and coverage. That’s paying off as customers use more mobile data for services like music downloads, mobile gaming and e-books.

As well, earlier this year, Atlantic entered the solar energy market by acquiring 28 solar farms in Massachusetts, California and New Jersey. The company paid $103 million for these assets ($64 million in cash and the assumption of $39 million of debt).

Even after the purchase, Atlantic holds cash of $391.8 million, or $24.48 a share, and has low debt. In the three months ended June 30, 2015, the company’s revenue rose 8.5%, to $90.3 million from $83.3 million a year earlier. Earnings fell 17.4%, to $9.5 million, or $0.59 a share, from $11.5 million, or $0.72.

The decline was mostly due to an increased tax rate. The company plans to use some of its high cash balance to further expand in renewable power. That adds diversification, but entering markets outside its telecom expertise also adds risk. Meanwhile, the stock trades at a high 24.4 times the $3.05 a share Atlantic is forecast to earn in 2015.

Atlantic Tele-Network is a hold.

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