+ Watch CONE
on My Watchlist
TMFRoyalMentined in his write-up for CBB
Contrarian, underfollowed, undervalued recent spin-off.
800% growth in industry and this company is growing contracts like weeds.
CONE, the Cincinnati Bell data center REIT spin-off, at first glance seems expensive. Nevertheless, I heard the CFO interviewed--he is optimistic about growth rate for 2013 and beyond and sees CONE capturing more of their target sector, mid-cap company data requirements. Many CONE data center clients are Texas oil/energy companies and I look for that sector to grow in the year ahead and need CONE data services. This is a REIT with a low pay out but I expect that to improve as growth continues.
Yes, CyrusOne appears to be fairly expensive to me. However, it is both a spinoff and a REIT conversion, types of stocks that have significantly outperformed the S&P lately and historically. While the Grahm investor in me wants to value future growth at zero, there's no denying that the data center sector has some major tailwinds behind it right now and likely for some time to come.The special situations combined with a hot sector make this one a CAPS buy. As I mentioned, I think that it's a little rich for real money though. time will tell.Deej
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