IHS | The Tower King Beat, Raised and Still Has 3x+ to Go
Fresh off a guidance raise, IHS is leaner, debt is down, and FX is turning from a drag to a tailwind. Here’s why I still see $25+ from today’s $7.31.
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The Turnaround Investment Newsletter
Since the start of 2024, my portfolio is up 220.71%.
This year alone, I’m sitting at +73.14% YTD through July.
All earned with setups just like this. Mispriced, unloved, and loaded with leverage to a theme no one’s paying attention to yet.
This week’s Portfolio Spotlight covers a name I’ve held through major FX volatility. IHS Holdings ($IHS).
The setup?
You’re getting the #1 tower company across 6 countries coming out of struggle stronger than ever.
If you don’t know the name, I’ll walk through it all:
What they do
What Q2 told us
Why they are setup for margin expansion
The risks
And why I expect $25+ per share (More than 3x from today’s price of $7.31)
Let’s get into it.
What Does IHS Do?
IHS Holdings builds and operates telecom towers in fast-growing markets. Mainly Nigeria, and Brazil.
On each tower IHS builds they rent out the space on them to mobile carries who wish to extend the range of their services. These are long-term, inflation-linked contracts typically 5 to 10+ years.
Adding a new tenant? Almost pure profit. Same tower, more rent.
This give IHS:
Recurring cash flows
Predictable CPI escalations
Minimal incremental cost per new tenant
And the tailwinds here are massive.
Data usage in IHS markets is expected to grow at 21.2% CAGR through 2029. 4G/5G penetration is projected to rise from 57% in 2024 to 86% by 2029.
That means more users, more bandwidth demand, and more reasons for carriers to lease additional tower space.
Q2 Earnings Highlights
Management beat expectations then raised full-year guidance across every metric.