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Strategies & Market Trends : Value Investing
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From: MNTNH12/7/2013 2:42:04 AM
2 Recommendations

Recommended By
E_K_S
Sergio H

  Read Replies (3) of 78748
 
DLR
Coincidentally the founder, Michael Foust is here in Singapore and the business magazine did a cover on him.
It seems like theres more down than ups. I also read up on the company and heres the takeaways.

downs
- understated capex
- no moat
- despite being the largest data centre REIT, has some pricing issues (i.e industry overcapacity esp Silicon Valley and thats why Foust is in Asia)
- competitors includes new entrants like Google, Amazon and Microsoft (all 3 are cage rattlers)
- Savvis (10%) and IBM are only at best total of 20% of total revenues
- increasing dividends doesnt seem sustainable
- its PBR is line with the "understated capex"

ups
- largest in the field, others are CyrusOne, Dupont Fabros, Coresite Realty and Equinix (REIT conversion)
- overall data usage and cloud conversions remain high
- blue chip clients Savvis and IBM

Jonathan Jacobson from Highfields Capital was quoted to have noted many of the cons.

*** A good short

Comps
REITPX MCAP (us m) YTD (%)PBR Div yield (%)
DLR47.236,066 -30.4 2.16.6
Cyrusone 20.4 448 7.4 1.4 3.1
DuPont Fabros 23.61 1,528 -2.31.74.2
Coresite Realty32.29 690 16.73.23.3
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