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Strategies & Market Trends : Value Investing
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To: rllee who wrote (52682)11/2/2013 8:34:30 AM
From: Mr.Gogo  Read Replies (1) of 78714
 
Hi Paul,

I read a few articles a few months ago about DLR on seeking alpha. Usually whatever you read there if you do the oposite you will do fine (in my experience :) Just for fun I put some buy orders at 40, now that they are approaching execution I opened the income statement of DLR and what to see. They earn 34 cens per quarter and paying 78 cents. They sell 15-20 million shares per year. The difference between this and Madoff is they have an underlying business.
3.5 bil paid in capital + 4.27 bil total debt is what went approximately in the company and all this is earning 200 mil of net income.
200 mil / 7.8 bil = 2.5% return on the invested capital. And this is a commodity business. You cannot dictate prices to Google or Amazon. Unless they find more smaller customers who cannot build their own data centres. In this business you need to depreciate the assets as they become obsolete very fast. I think they have a fair depreciation rate.

Good Investing,
G
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