Seeking Alpha

Internap climbs on positive mentions at Barron's roundtable

  • Internap Network Services (INAP +8.7%) shares climb after the name is mentioned favorably at a Barron's roundtable over the weekend.
  • O.S.S. Capital's Oscar Schafer thinks that INAP's "legacy bandwidth-resale business" masks the growth rate of its data-center business (13% annually since 2010, with operating margins expanding 13% over the period).
  • Schafer thinks margins have further room to expand with new company-owned data centers currently at <60% utilization.
  • With the data-center ops now representing over 50% of revenue, Internap could be the target of a telco or IT services company. Historically, transactions have occurred at 10x EBITDA, while Schafer estimates Internap trades at <7x 2015 EBITDA.
  • Gamco Investors' Mario Gabelli chimes in that CEO Eric Cooney, "is terrific" and that his fund remains the company's largest shareholder.
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