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Strategies & Market Trends : Fundamental Value Investing

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To: Sergio H who wrote (3072)	6/6/2013 1:31:24 PM
From: E_K_S	Read Replies (1) of 4720

Cyrusone Inc. (CONE) -NasdaqGS This is another "Cloud Computing" company I have been following. My buy target was $12.00-$15.00/share but their IPO went out at $21.00/share on 1/18/2013, I just watched the company. It traded as high as $24.00/share but has sold off recently to $20.88/share. I just went back and looked at their FFO. It looks like they will generate a FFO for 2013 of $1.08/share. So using my 13x FFO figure, my initial target price seems to be correct (ie $14.00/share). Based on today's price of $20.90.share, CONE is selling at 19.35x their 2013 FFO. Just another data point to confirm to me that DLR's FFO selling at 13x FFO is still a bargain. Of course, if any of these "cloud" computing companies slip up on their FFO and begin to report lower growth, look out below. Based on the recent sell off of both CORE and CONE, maybe some of those "value" investors where selling their high priced shares and buying some DLR. This sector is somewhat new so the past FFO history is not that good. I could see the whole sector sell off significantly (perhaps by 20%) if the growth in their FFO stops. EKS

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