What Did You Buy Today?

[stockguru]

(04-17-2020, 12:58 PM)Binary Wrote:

(04-17-2020, 12:36 PM)divmenow Wrote:

(04-17-2020, 12:14 PM)MikeWa Wrote:

(04-17-2020, 12:00 PM)divmenow Wrote: Took a large position in IRM today. That just made it to my 6th largest holding now.

Data center reits are the way of the future. Although data is just a small portion of what the company does, they will grow that unti over time.

I think anything below $25 is a steal

I've been watching IRM for awhile now, but couldn't make my mind about it and pull the trigger.

My understanding is IRM is not a typical data center, but rather a storage facility for physical data, like paper documents, backup tapes and so on. Most companies will send their backup tapes off-site for a secure storage in case of a disaster, but not sure about paper storage. There must be some legal requirements for certain businesses and certain records to be stored as paper documents for a number of years, I am just not sure if the demand for this type of storage will grow.
Also with most companies moving their applications and data to the cloud, demand for offsite storage of digital media may decrease with time as well.

While many view paper storage as an "old" and "dying" industry, for many companies storing old data is essential and sometimes compelled by law. Converting records to digital is extremely expensive and even destroying records is expensive relative to storing them. So there is a big need for this. Their document storage segment of the business has little competition and high cash flow generation to feed expansion.

And they just started getting into data center industry. They provide secure, compliant data centers with efficient access to top carriers, cloud and IT services providers. Easily access cloud, telecom, and IT services providers. Plus, make remote management efficient with our software and smart hands.

I started to look closer, but the debt level scared me off. Free cash flow doesn't cover the dividend, how do they pay? That was a red flag for me.

IRM is good little company. I bought  a few times this month. My thinking is that with all of the volumes of paperwork and information coming out of the government's efforts to boost the economy, IRM will pick up a lot of this business. Think about all the bank documents (loans, modifications, etc), unemployment files and data, information about restructured companies, etc. They need to house this stuff somewhere. I liken IRM to Self Storage warehouses. They get busy when our lives get upended (divorce, lost jobs, lost house, death, people moving around).

They are in the sweet spot.