REITs are viewed as bond surrogates. The value of bonds and similar income investments frequently de...
Coresite: Data and Dividends
02/06/2017 9:00 am EST
Our latest recommendation takes you into the world of REITs, even as a former real estate salesman took the helm of the United States, notes Nicholas Vardy, editor of Bull Market Alert.
Denver, Colorado-based CoreSite Realty Corporation (COR) offers cloud-enabled, high-performance data center campuses.
Operating across 17 data centers in eight key North American markets, CoreSite serves a broad range of clients, including telecommunications carriers, media companies, financial and educational institutions, and government agencies.
The REITs sector that just recently found its footing in the market. Here's why I expect CoreSite to continue its strong recent run:
First, with the growth of cloud computing, the Internet of Things and big data, and an increasing number of companies opting for third-party IT infrastructure, data center REITs like CoreSite are booming. CoreSite recently increased the occupancy rate of its data centers to 87.6%, which is near record levels.
Second, CoreSite's business is growing by leaps and bounds. Total operating revenue for Q3 2016 hit $101.3 million, a 17.2% increase year over year. Funds from operations hit $0.90 per diluted share, representing 21.6% growth year over year.
CoreSite also raised its dividend by 50.9% to $3.20 per share, which equates to an annual dividend yield of 4.54%. A fast-growing business that is also throwing off a lot cash is hard to beat.
Third, CoreSite's senior management is betting big on CoreSite's own success. President and CEO Paul E. Szurek bought 7,000 shares for $68.92 per share on Dec. 5., lifting his overall holding in the company to 59,561 shares. The stock price has increased by 10.69% since then.
A lot of smart money is also betting on CoreSite. Investment legend Ken Heebner's Capital Growth Management owned 95,000 shares of CoreSite at the end of the third quarter.
Nine successful small-cap strategies I track also are betting on CoreSite's success. So buy CoreSite Realty at market and place your stop at $76.00.
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