A quick look at year-to-date performance for data center related stocks highlights a few interesting things:
The REITs category is the sub-sector with the most defined performance. All stocks basically achieved a 14% increase since the beginning of the year. It is interesting to note that Digital Realty (DLR) and Dupont Fabros (DFT) already reported Q4 2010 results, while Coresite (COR) will report quarterly results on Thursday, March 10.
The two network neutral players under our scrutiny, Equinix (EQIX) and TeleCity (TLEIY.PK), listed in London, are slightly positive, but their sub-sector is the worse performer so far, excluding the CDN category, which needs a specific analysis.
The best performances came from Savvis (SVVS) and Rackspace (RAX), both of which probably enjoyed the most from the cloud computing acquisition binge that positively impacted the stocks along with Internap (INAP) at the end of January. As a reminder, we excluded from the list both Terremark (TMRK) and Navisite (NAVI), both of which were acquisition targets at the end of January/beginning of February, and whose performances were obviously positive, as they both enjoyed a premium in excess of 30% from their buyers.
The CDN category sees very opposite results, with Limelight (LLNW) very positive (+20%) while Akamai (AKAM) was the only loser among the companies under our radar screen (-20%). Most of this negative result (-15%) was achieved after releasing Q4 earnings, as 2011 guidance disappointed both investors and analysts' expectations.
Here is a quick look at the post-earnings performance for all stocks that recently reported quarterly numbers:
All stocks were coming from a very positive January for the sector, that saw all companies in the green:
Disclosure: I am long EQIX.