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Hi,

Pinnacle Holdings has been aggressively acquiring tower sites. After completing pending transactions, including a closed deal with Motorola (1850 sites), they will be managing 3600 communications tower sites all over the country. This will place it second to Crown Castle which has 6100 sites.

Pinnacle leases tower space for cellular, paging, wireless data xmission, radio & TV xmission. Their clients include Sprint, BellSouth, Skytel & the FBI.

Sites recently acquired include towers atop the World Trade center in NY, Sears Tower in Chicago & the Allied Bank building in Houston.

Pinnacle went public in Feb & has appreciated in price 92% since then. In the second quarter sales rose 93% to 13.7 million. but the company posted a loss of $12.1 million, ($0.38/share). Cash flow was $11.1 Million or 81% of revenue.

I'm considering establishing a position in this stock. Anyone out there have any thoughts about this company &/or the long term prospects for tower operators? Other competition?

Pat
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No. of Recommendations: 0
Pat1234 offered:

Pinnacle Holdings has been aggressively acquiring tower sites... I'm considering establishing a position in this stock. Anyone out there have any thoughts about this company &/or the long term prospects for tower operators? Other competition?

Don't know specifically about Pinnacle. SaloonGal has small positions in Crown Castle (TWRS) and American Tower (AMT). Check them out. They may be the sort of thing you are looking for.

Maria


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American Tower AMT is the dominet player in this field.
I think that a tower operater is a important link in any Telecom portfolio

Chaz
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RE: *I think that a tower operater is a important link in any Telecom portfolio*

You've got to ask the question "Why aren't the service providers interested in maintaining their own towers and renting to each other?"

The tower and the hardware associated not only requires complex, multi-company maintenance contracts, but it draws public outcry like lightning (sorry).

Many tower providers have fought for new towers for years.

And one point that may be pro or con: the method of adding capacity (more wireless end users) on an existing network is to divide the hexagonal cell and use MORE antennas.


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Musical Cubes wrote: You've got to ask the question "Why aren't the service providers interested in maintaining their own towers and renting to each other?"

I think the answer to this is twofold:
1. Tower companies are good at what they do. Maintaining and operating towers, plus leasing them to other service providers, is a full time business. This business is the tower cos. core competency. It is not the core competency of service providers.

2. The price is right. Tower cos, fully funded by some of the big investment banks are paying top dollar for these assets, sometimes up to $500K per tower.

Note for example that just yesterday (9/14) AT&T sold 1,900 towers to American Tower for $250+ million in cash.....
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Pat1234,

Thanks for your recommendation. I had never heard of Pinnacle until you mentioned it the other day. I have spent the better part of this week delving into the industry and I think some of these companies will enjoy huge free cash flows down the road. Ultimatley, no company's stock will appreciate in price unless it can produce increasing amounts of free cash flow.

I recently bought Pinnacle Holdings(BIGT) as my favorite stock in this industry. I also started a link discussing the investment aspects of Pinnacle, American Tower Corp(AMT) and Crown Castle(TWRS).


For those interested.

http://boards.fool.com/Message.asp?id=1380180000152000&sort=postdate


By the way, what else are you looking at? I may just follow you into your stocks. You have superb taste in companies if they are all like Pinnacle. I am convinced that this stock has huge possibilities. Recommending BIGT strongly at it's current $27 a share. Thank-you very much for your recommendation!

Best wishes,

Doug


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