Cyrusone: Illusions Of Value
CyrusOne: Significant Stock Upside And Dividend Growth Potential
Wed, May 4, 6:06 PM
Tue, May 3, 5:35 PM
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Wed, Mar. 16, 7:17 AM
- CME Group (NASDAQ:CME) agrees to sell its Aurora data center to CyrusOne (NASDAQ:CONE) for $130M. As part of the deal, CME will enter into a 15-year lease for space, will continue to operate Globex from there, and will offer co-location services, with the ability to expand that going forward.
- For CME's part, the deal further gets the exchange operator out of the real estate business. For CONE's part, this boosts the size of its portfolio to 33 data centers globally. This particular facility is 428K square feet.
- Source: Press Release
Tue, Mar. 15, 5:40 PM
Tue, Feb. 23, 6:11 PM
- CyrusOne (CONE -2.1%) noted a 30% increase of revenues in a Q4 earnings report in which it hit record leasing space.
- Despite the growth, the revenue fell short of expectations, but the company beat on FFO and EBITDA of $60.5M (up 36%) beat consensus.
- The company leased a record 205,000 co-location square feet and 30 megawatts in the quarter, totaling $44M in annualized revenue. Some $19M-$24M of that is expected to be recognized in 2016 with the full $44M recognized in 2017.
- Net operating income was up 31% to $71.9M from a previous $54.9M.
- At year's end, the company had about 1.574M CSF across 32 data centers (up 28%). CSF utilization was 86%. Long-term debt was $996.5M in long-term debt, and it had cash and equivalents of $14.3M along with $407.9M available in a revolving credit facility.
- It's guiding to 2016 total revenue of $485M-$500M (vs. expected $498M), and adjusted EBITDA of $258M-$268M and normalized FFO/share of $2.45-$2.55 (both in line with expectations).
- Conference call to come tomorrow at 11 a.m. ET.
- Press Release
Tue, Feb. 23, 5:05 PM
Mon, Feb. 22, 5:35 PM
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Mon, Feb. 22, 10:46 AM
- Broadly speaking, Q4 results met expectations, says Deutsche's Vin Chao, with industrial and mall REITs doing marginally better-than-expected, apartment, strip mall, and office REITs mostly inline, and healthcare missing modestly.
- While guidance from 9 of 13 REITs that provided it was below expectations, says Chao, most of those misses were due to "prudent funding" entailing higher-than-expected property sales. Also, given the recent market backdrop, one would expect managements to lean conservative.
- He continues with Buy ratings on Simon Property (NYSE:SPG), AvalonBay (NYSE:AVB), Boston Properties (NYSE:BXP), CyrusOne (NASDAQ:CONE), and Retail Properties of America (NYSE:RPAI).
- ETFs: IYR, VNQ, DRN, URE, RQI, SCHH, SRS, ICF, RWR, RNP, JRS, KBWY, RFI, NRO, DRV, RIT, REK, RIF, FRI, DRA, FTY, PSR, FREL, LRET, WREI, IARAX, XLRE
Tue, Feb. 9, 1:38 PM
- CyrusOne (CONE +0.3%) and Alaska Communications (ALSK -3.2%) have set a partnership where the latter will serve as a channel partner and use CyrusOne's Houston data center to give business/government customers secure storage alongside connectivity to Alaska.
- "Our customers trust us to securely enable their migration to the cloud," says Alaska Communications chief Anand Vadapalli, "and this partnership now connects Alaska businesses to any of CyrusOne's Lower 48 data centers."
- The deal will provide interconnectivity via CyrusOne's Internet Exchange to dispersed strategic data center sites in the continental U.S.
Wed, Jan. 13, 3:50 PM
- JPMorgan sees a long-term path for growth in data center REITs, with an early-stage transition progressing in infrastructure outsourcing, and it's leaning toward faster-growing firms.
- That means CyrusOne (CONE -4.2%) gets its top kudos, though it saves some praise for Digital Realty Trust (DLR -0.5%) and QTS Realty Trust (QTS -1.7%).
- "Digital Realty on January 4 issued solid 2016 guidance and we look for even better growth guidance from CyrusOne and QTS Realty Trust when they report in February," the firm said.
- Digital Realty may grow more slowly due to its size, and substantial wholesale revenue. "We like Digital Realty for its scale, stability and dividend, but the company's lower growth outlook, in our view, justifies a lower multiple for the company," JPMorgan says. "We look for low- to mid-double-digit growth rates in revenue, EBITDA, FFO and AFFO for CyrusOne and QTS in 2016 on a standalone basis."
- The firm maintains Overweight ratings on CyrusOne and QTS.
Fri, Jan. 8, 9:46 AM
- These income favorites are known for having had a tough time of it in 2015, in part thanks to worries about rising interest rates. MKM's Jonathan Krinsky, however, notes REITs have been relatively outperforming the S&P 500 for months and have just broken out to nine-month highs versus the broader market.
- Krinsky's a technician, so he's staying with the trend and recommending going long REITs (NYSEARCA:IYR) versus the S&P 500.
- Turning to individual REIT sectors and names, he's overweight apartments (AIV, AVB, ESS, EQR, MAA), UDR), storage (CUBE, EXR, PSA, SSS), and shopping malls (KIM, MAC, FRT, REG, IRM).
- He's equal weight data centers (buys: CONE, DCT, QTS, sells: EGP), diversified (buys: AMT, CCI, DLR, DRE, PSB, sells: EQIX, LPT, STAG, VNO, WY, WPC).
- He's underweight office property (buys: EQC, sells: HPP, FSP, GOV, KRC, OFC, PKY, SLG), hotels (sells: AHT, FCH, HPT, HST), mREITs (sells: ARR, STWD, RSO, buy: ABR), healthcare (sells: HCP, MPW, OHI, VTR, buys: DOC, HR, HTA)
Dec. 31, 2015, 2:36 PM
- In a continuation of a separation process from CyrusOne (CONE -0.2%), Cincinnati Bell (CBB +1.1%) says in an 8-K that one of its subsidiaries exchanged all of its operating partnership units (6,346,835 of them) in CyrusOne for the same number in newly issued shares of common stock.
- The move means that Cincinnati Bell no longer holds any operating partnership units in the data-center operator
- Cincinnati Bell maintains about a 9.5% stake in CyrusOne, only now all in common stock.
- CyrusOne has been gradually buying out its relationship with Cincinnati Bell at various points throughout the year.
Dec. 14, 2015, 5:15 PM
- Cincinnati Bell (CBB -3.7%) has closed a secondary offering of its stock in CyrusOne (CONE -1%), for net proceeds of about $47.6M.
- The company offered 1.35M shares. After the offering, Cincinnati Bell maintains about a 9.5% stake in the data center operator through common and exchangeable shares.
- CyrusOne has been gradually buying its way out of its relationship with Cincinnati Bell through a number of transactions.
Dec. 8, 2015, 4:26 PM
- Cincinnati Bell (CBB +4.2%) plans a sale of 1.35M shares of CyrusOne (NASDAQ:CONE) in a public offering to close Dec. 14.
- With CONE at $36, that comes to just under $50M before expenses. Cincinnati Bell says it plans to use proceeds for general purposes.
- The move should leave Cincinnati Bell with about a 9.5% stake in CyrusOne via common shares and its stake in exchangeable units of CyrusOne's limited partnership.
- Cincinnati Bell has been steadily divesting the partnership, with CyrusOne buying out parts of it earlier this year.
Nov. 24, 2015, 8:28 PM
- Favorable trends in cloud traffic are a boon for data-center companies, says SunTrust Robinson Humphrey in a positive launch on the sector.
- Analyst Inder Singh singled out CyrusOne (NASDAQ:CONE), DuPont Fabros (NYSE:DFT) and Equinix (NASDAQ:EQIX) as picks in the space, which should benefit from growing bandwidth-intensive applications, particularly streaming video. Traffic is expected to grow at a compound annual growth rate of 23% through 2019.
- "Given that two-thirds of internet traffic is data center related, the importance of data centers both from a colocation and cloud perspective is significant," says Singh. "Data center traffic is the biggest component of Internet traffic, almost twice as much as the traffic that transverses IP WAN networks."
- Mergers and acquisitions could continue, too, as companies look to become "one-stop shops" for clients and pursue scale.
- The firm launched CONE, DFT, EQIX and Zayo Group (NYSE:ZAYO) at Buy, along with a Buy rating for Cisco Systems (NASDAQ:CSCO), as well as a Neutral rating for Internap (NASDAQ:INAP).
- Price targets: $43 for CONE (22% upside from today's $35.25); $40 for DFT (22% upside from today's $32.90); $345 for Equinix (18% upside form today's $293.21); $32 for Cisco (17% upside from today's $27.27); $7.50 for Internap (7.5% upside from today's $6.98); $34 for Zayo (41% upside from today's $24.02).
Nov. 23, 2015, 8:34 PM
- Data center operators probably aren't in a buying mood for facilities that might be for sale -- particularly CenturyLink's, Macquarie suggests in a new report -- but private-equity firms could come in with bids.
- CenturyLink (NYSE:CTL), the nation's third-largest local phone company, plans to sell 59 centers worldwide, and while Macquarie had thought Digital Realty Trust (NYSE:DLR) would get involved, analyst Kevin Smithen has changed his view after attending an industry trade show.
- He now doubts that a buyer will come from among Digital Realty, DuPont Fabros (NYSE:DFT), Equinix (NASDAQ:EQIX), CyrusOne (NASDAQ:CONE), CoreSite or QTS Realty, with a limited "pool of logical and capable buyers" for assets from CenturyLink, or from Verizon (NYSE:VZ) or AT&T (NYSE:T). But near term, "private equity seems like the most likely acquirer of assets this size."
- While CenturyLink assets are for sale, Verizon CFO Fran Shammo tried to shut down "speculative" reports that the company would pursue $10B in asset sales.
CyrusOne, Inc. owns, operates and develops enterprise-class, carrier-neutral, and multi-tenant data center properties. It provides mission-critical data center facilities that protect and ensure the continued operation of information technology infrastructure for different customers.... More
Industry: REIT - Diversified
Country: United States
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