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  • Verizon rebounding on report it's considering $10B in asset sales [View news story]
    The VZB (MCI) assets being proposed for sale are all the dedicated customers connected directly into AS701. Those customers pay for internet access and the circuit which connects them. I believe the way VZ adds up the numbers, the cost of supporting/maintaining that whole network isn't worth the cost being paid by the customers. You need telco equipment, networking equipment, field staff, tech staff, NOC staff, security staff, HR staff, etc, etc.... So why not just unload the whole kit and caboodle and focus on selling higher profit margin businesses that cater to end users, such as security products, over the top content products, wireless products, etc, etc....

    What VZ is doing makes complete sense in terms of boosting it profit margins and lowering it's operating costs.
    Nov 8, 2015. 11:30 AM | 1 Like Like |Link to Comment
  • Phillips 66: A Blue-Chip Investment Among The Refiners [View article]
    COP's recovery in the last month has been amazing.
    Nov 6, 2015. 10:11 PM | Likes Like |Link to Comment
  • Kinder Morgan: Financially Sound But Growth Cannot Be Relied Upon [View article]

    Why is everybody so hung up on growth? Once you build the tollroad, you collect fees and send the proceeds to the shareholders.

    If investors want growth, maybe they should buy the SPY. In my opinion, 7%+ dividends is nearly on par with the historical average of market returns. So I can enjoy the best of both worlds, I'm just taking my KMI dividends and buying the SPY.

    I'm not expecting KMI's shares to rise or fall much more than where they are today. We are talking tollroads after all, a fixed network to get a widget from A to B for a fee.
    Oct 31, 2015. 10:31 AM | 1 Like Like |Link to Comment
  • Is DuPont Fabros Cheap For A Reason? [View article]

    How do you like them apples? ;-)

    DuPont Fabros beats by $0.01, beats on revenue.

    DuPont Fabros (NYSE:DFT): Q3 FFO of $0.62 beats by $0.01.
    Revenue of $115.34M (+9.2% Y/Y) beats by $2.92M.
    Oct 29, 2015. 11:13 AM | Likes Like |Link to Comment
  • Kinder Morgan’s new convertible shares have 9.75% coupon [View news story]
    As long as KMI keeps paying me 7.00%+, then these stock swings aren't even on my radar.
    Oct 27, 2015. 12:19 PM | 2 Likes Like |Link to Comment
  • Is DuPont Fabros Cheap For A Reason? [View article]
    The funny thing about all this debating is that DFT is up 6.56% in the last week and almost 20% for the month. Did I also mention the smart money has price targets around $34-$35/sh.

    The way I see it, the DFT haters are just gonna hate. Personally all the haters sound more like Short Sellers trying to avoid a margin call. ;-)
    Oct 27, 2015. 09:59 AM | Likes Like |Link to Comment
  • Is DuPont Fabros Cheap For A Reason? [View article]
    A whole 3.5% loss. Given DLR's more massive footprint, I'd expect it has the same issues to contented with among it's smaller customer base. Given Facebook's expansion plans with DFT, the Net Data Center loss is water under the bridge.
    Oct 26, 2015. 11:01 PM | Likes Like |Link to Comment
  • Is DuPont Fabros Cheap For A Reason? [View article]
    ...all things that DFT is no more susceptible to than DLR. ;-)

    It doesn't matter if you are an industry leader or a small fry, if your customer goes bankrupt, your lease is negated in court. lol
    Oct 26, 2015. 07:25 PM | 1 Like Like |Link to Comment
  • Is DuPont Fabros Cheap For A Reason? [View article]

    Least we forget, DLR, DFT, COR, etc are still REITs at the end of the day. By default they pay at least 90% of their taxable income as dividends. So in my book, the real metric should be with who's stock yields the best dividend. Cause if you want to focus on equity returns, the S&P 500 (SPY) beat both DLR and DFT in the last 5 years by 3x.
    Oct 26, 2015. 04:36 PM | Likes Like |Link to Comment
  • Is DuPont Fabros Cheap For A Reason? [View article]
    ...least we forget the 5.54% yield you get while holding DFT chewing your fingernails and stressing over their contract renegotiation for the next 4-5 years. And given the pace of technological change and more stuff going online (ie: Yahoo Streaming the NFL), the demand for more and more datacenter space will either yield rackspace shortages (giving DFT a stronger hand that you like to see) or an increase in the number of tenants as everybody competes to send content "over the top".

    Nobody knows what the world might be like a few years from now, but I'd be hard pressed to entertain a "SELL" rating on DFT given a minor risk on contracts pricing lower several years from now. ;-)
    Oct 26, 2015. 10:20 AM | 1 Like Like |Link to Comment
  • Is DuPont Fabros Cheap For A Reason? [View article]
    I disagree that geographic diversification has any bearing what so ever when it comes to Data Center REITs. Where a server is located means absolutely nothing to the person using it so long as the millisecond times between the user and server are reasonable. As such, you don't need massive geographic diversification beyond having a footprint in key regions across the country. DFT has footprints in one of the largest DC markets in the country (Ashburn, Virginia), as well as a few other spots around the country. But the reason why so many DCs are in Virginia is because (a) Power is Cheap, (b) Fiber Lines are Plentiful, (c) growth costs are modest, (d) taxes are low, (e) both local and state governments are bending over backwards to attract DCs to the region.

    Also given the fact that a user in PoDunk, Kentucky likely can't tell the difference between their Facebook page coming from Virginia or California means that geographic diversification for a global client basis is meaningless with regards to REITs like DFT. It's not like an office REIT where you need a property in a market in order to tap revenue from that market. DFT's ACC7 facility could be serving clients with offices in Middletown, Oklahoma.

    As for DFT having a lack of tenant diversification appears like it might be a problem, but I overstress the point that getting tenant contracts into your data center can be a "VERY" sticky contract that is highly unlikely to be lost given the high cost of tenants moving to a competitor. Effectively, once you've got them as a customer, they'll likely be a customer for life. I'm pretty sure if you look at the tenant churn for data centers, it's very low (assuming that client has any significant presence).

    I do agree that contract renewal/negotiations are the "ONLY" real tangible risk and that risk is only a renegotiation to the "going market rate" for leases. So if DFT's leases are a bit high on the old contracts and might come down on the new contracts, the real impact on revenues will be minimal. So the fear of some catastrophe at DFT is overblown in my opinion.
    Oct 26, 2015. 09:31 AM | 1 Like Like |Link to Comment
  • Is DuPont Fabros Cheap For A Reason? [View article]
    One argument about DFT is that it is, "highly concentrated in only four markets" while at the same time it's main customers are global in nature (ie: Microsoft, Facebook, Yahoo, Rackspace, etc). Please explain how geographic concentration in 4 markets (some of the most high tech markets in the US) are a problem?

    You also point out that DFT's tenant base is also highly concentrated. Please explain why any of DFT's existing customers, which currently fills 96% of their capacity, will have any motivation to switch to a competitor? After all, moving servers, recabling, ordering new circuits/cross-connects, isn't cheap and that any savings offered by a competitor will be negated by the moving costs. Please do explain or show a history of tenants relocating when their leases are up?

    The way I see it, the proposed risks with DFT are baseless beyond little more than imaginary fears that a Microsoft, Facebook, or Yahoo are going to pull their gear from DFTs properties located in some of the hottest markets in the US. Not to mention you even said yourself that Facebook is likely expected to renew their lease. The only real risk is from future leases being negotiated lowered to some degree. All of which could be made up by increasing their tenant base into their new ACC7 facility.

    On May 13, 2015 DFT and Facebook entered into a new lease for 7.43 megawatts (“MW”) of available critical load and 43,000 square feet of computer room space in DFT’s ACC7 data center. The new lease included space for 4.46 MW in ACC7 Phase I, which commenced immediately; and 2.97 MW in ACC7 Phase II, which commences at the building’s projected opening date in the fourth quarter of 2015.

    The lease increased ACC7 Phase I’s percentage leased to 84% on a critical load basis and raises the occupancy of DFT’s operating portfolio to 96% from 94%. ACC7 Phase II is now 33% pre-leased. The weighted average lease term for both spaces is 7.4 years.
    Oct 26, 2015. 08:22 AM | 1 Like Like |Link to Comment
  • Kinder Morgan: What To Do After Yesterday's Shell Shock [View article]

    KMI is a tollroad, thus it's a money maker. As long as demand for the goods it transports isn't in decline, then KMI's future is bright. And with a 7% yield, you'd have to be a fool to sell.
    Oct 23, 2015. 07:49 AM | 14 Likes Like |Link to Comment
  • Kinder Morgan weighing on entire MLP sector [View news story]
    Plain and Simple, Banks are scared the drop in oil will cause a zillion bankruptcies and they won't get their money back. As such, everybody who touches oil are being charged much higher rates to borrow money.

    I see nothing wrong with KMI finding alternative lenders who aren't stressing out over oil.
    Oct 22, 2015. 03:43 PM | 12 Likes Like |Link to Comment
  • Data Center REIT Digital Realty Trust Investor Day: '@Connects' The Dots [View article]
    I guess this is why we have a market. Everybody sees the world differently. :-)

    "For example, with its substantial overseas presence, the company is susceptible to foreign exchange markets. In fact, the company's 11.6% core FFO growth rate in the second quarter was cut to 7.4% by unfavorable FX trends."

    "And there is always the possibility that data needs won't grow as quickly as projected, which could present a problem for Digital Realty when it comes to finding tenants for its newly developed data centers."

    -Matthew Frankel (Motley Fool) -
    Oct 19, 2015. 08:20 AM | Likes Like |Link to Comment