10-31-2013, 11:53 AM
(10-31-2013, 09:28 AM)fiveoh Wrote: It's down another 3% today for over a 6.6% yield.
http://seekingalpha.com/article/1792322-...ected-weak
This article sums up most of my thoughts on the risks/rewards involved with DLR, which I see as mostly short term(0-18 months). EVERYTHING is going to the cloud and I don't see digital storage demand slowing over the long term. Yes some of the larger companies are opening their own data centers, but a lot of them will find it easier/cheaper/more efficient to use DLR or similar companies.
From that article:
"Bottom Line: While certainly not a growth story, Digital Realty has a conservative balance sheet, scale within their markets and has seen decent lease-up volumes and is compelling for income focused investors. The stock is cheap to peers on virtually every metric and as a result of the earnings debacle is "on sale". Once again, I have to state from a total return perspective I like CoreSite, but I might be a buyer of Digital Realty for an income portfolio."
I see it as a good high yield, low growth prospect.
TBH my average price is somewhere around 56-57 so i'm now down over 20% in 6 months on it. Not really what I was hoping for with my first REIT. lol. I figured it would be a low risk/high yield type of investment. Kind of funny the 2 companies I've lost the most on so far are a utility(exc) and a REIT(dlr). It also makes up a good chunk of my portfolio(7%) so I'm just going to sit tight. If it drops to 45 I will buy another chunk probably.
The recently announced $500M stock buyback is looking pretty good with the pullback. Could soak up about 8% of the outstanding shares at current prices.