Equinix (EQIX): Landlord of the Internet

By Timothy Lutts, Editor of Cabot Stock of the Month
From Cabot Wealth Advisory 3/1/12 Sign up for free Cabot Wealth Advisory

As an investor, I know the best prospects for success come by following the tried-and-true investing rules used by Cabot advisories … which lead to exciting (and successful) companies like … Equinix (EQIX).

Equinix is one of those invisible companies that make the Internet work but seldom show their faces to retail users. You can think of Equinix as the landlord of the Internet, in that it rents space and services to a variety of commercial entities.

What those companies get when they locate their servers in an Equinix facility are reliable electrical power, security and access to telecom lines from a variety of providers. They also get the functional advantage of being very close to other providers; Equinix, for example, is now advertising that if you place your servers in their Washington, DC facility, you’ll have direct access to Amazon Web Services.

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Today Equinix hosts more than 4,000 enterprises in 39 data centers in 12 countries on five continents. These include:

7 of the top 10 video sites
8 of the top 10 websites
9 of the top 10 advertising sites
5 of the top 5 social networking sites
4 of 5 smart phone platforms
300+ cloud providers
500+ IT service providers

And business is growing!

In the fourth quarter, revenues grew 25% to $431 million and earnings grew 21% to $0.35 per share.

Plus, the chart is strong!

Equinix has been in Mike Cintolo’s Cabot Market Letter Model Portfolio, for over a month, and subscribers who’ve followed his advice already have a profit of more than 20%.

Here’s what Mike wrote in his initial buy recommendation:

“The stock was one of the first to lift off, which is always a good sign; shares reached a four-year price high last week. As for the story, the company is attractive to us because of its position at the heart of the Internet; the firm’s six million square feet of data center space and its various co-location and interconnection services make it the go-to player for companies doing business online. Cloud computing is helping the cause, of course, but the idea is broader than that–as Internet usage picks up, Equinix is sure to benefit as companies look to expand their networks or speed up their applications. The business is capital-intensive, and Equinix is still spending plenty of money expanding its data centers. Most of its revenue is recurring (monthly or quarterly payments), resulting in at least 15 straight sequential quarterly gains in the top line.”

So, you could just take a flyer and buy it now, but then you’d be on your own.

I recommend you join Mike’s happy subscribers. Details here.

Editor’s note:
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