They are reporting a leverage ratio of ~7. My initial hot-take: That's a leverage multiple; not a ratio. Yet reading their formula they are reporting that 7 as DEBT / PRE-DEPRECATION-PROFIT. Thus such a formula is not an LTV but rather a formula one might use if one acknowledged the underlying assets only had cashflow value.
Using an LTV formula they look more reasonable at 0.7LTV. Which indeed is high, about half the equity common to the REITs I've looked at. Yet with a 10% return on invested capital it does not seem the infrastructure was overvalued.
Now this is not an area I know much about so I'm mostly hoping you can show me where I'm wrong and thus I can learn more.
Honestly I have no idea how their financials look like, I'm simply playing trends (I've even bought into BYND and exited at some profit). But one thing I do know is that the stock prices of AMT and SBAC do not look particularly different in the times when rates were going up (Oct 2015 - Dec 2018 [1]). Of course such behaviour could be just long term market delusions, so trade with caution!
Looking at the lastest financials report: https://s22.q4cdn.com/758587962/files/doc_financials/quarter...
They are reporting a leverage ratio of ~7. My initial hot-take: That's a leverage multiple; not a ratio. Yet reading their formula they are reporting that 7 as DEBT / PRE-DEPRECATION-PROFIT. Thus such a formula is not an LTV but rather a formula one might use if one acknowledged the underlying assets only had cashflow value.
Using an LTV formula they look more reasonable at 0.7LTV. Which indeed is high, about half the equity common to the REITs I've looked at. Yet with a 10% return on invested capital it does not seem the infrastructure was overvalued.
Now this is not an area I know much about so I'm mostly hoping you can show me where I'm wrong and thus I can learn more.