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Kings of Iron Mountain - Eleven Gurus Hold IRM, Five New Buys

September 16, 2013 | About:
Sally Jones

Sally Jones

49 followers
With five Guru billionaires making new buys in Iron Mountain Inc. (IRM) in the second quarter of 2013, and two more increasing their positions, it’s time for deeper look into the global data and information management company gaining a reputation as a technology innovator.

According to an Iron Mountain survey conducted by Spiceworks, a network of over 2.5 million IT professionals, 94% of small or mid-sized businesses are using or planning to use magnetic tape cartridges in their data back up plans. For Iron Mountain, this is valuable information coming from 91% of the survey respondents from organizations with fewer than 250 employees. The survey asked more than 400 North American IT professionals to assess the role of magnetic tape backup for their companies. With ever-increasing data management challenges, respondents concluded that tape is a foundational backup tool, due to cost effectiveness, longevity and ease of use. By asking the right questions of the right hands-on professionals, Iron Mountain has validated and documented the need for part of its own hybrid solution offering. The survey results were released earlier this month in a company press release.

Iron Mountain Inc. (IRM)

With a market cap of $5.08 billion, Iron Mountain Inc. is down 20% over the last 12 months. Shares trade at around $26.59 with a P/E of 38.50 and a P/B of 4.70. The dividend yield is 4.06%. GuruFocus currently ranks Iron Mountain 3 stars in Business Predictability.

Founded in 1951, Iron Mountain stores and protects billions of information assets, including business documents, backup tapes, electronic files and medical data. Iron Mountain’s real estate network of 64 million square feet across nearly 1,000 facilities in 32 countries allows it to serve customers around the world with speed and accuracy. The company operates in five segments: North American Physical Business, Worldwide Digital Business, Europe, Latin America and Asia Pacific. The company’s customer base is comprised of commercial, legal, banking, health care, accounting, insurance, entertainment and government organizations.

The company reported financial results for the second quarter ended June 30, 2013, with total reported revenues of $755 million, compared with $752 million in 2012. On a constant dollar basis, total revenue growth was 1.3%, reflecting storage rental revenue gains of 3.0%. Adjusted OIBDA was $233 million, compared with $239 million in 2012. Adjusted EPS was $0.29 per share ($0.14 per share on a GAAP basis), compared with $0.37 per share ($0.24 per share on a GAAP basis), in 2012, according to a company press release.

For the same quarter, the company reported that its global records management volume grew by 1.4% on a year-over-year basis, supported by strong 6.7% volume growth in the International business, primarily driven by solid increases from emerging markets in central Europe and recently completed acquisitions. North America records management net pricing increased by approximately 1.2% in the second quarter, while foreign currency rate changes in the second quarter reduced reported revenue growth rates by approximately 0.5%.

Track share pricing, revenue and net income since 1996:

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Guru Action: As of June 30, 2013, there are eleven gurus holding IRM. Five of them made new buys in the quarter. Pioneer Investments bought 80,500 shares, Joel Greenblatt bought 14,594 shares, Steven Cohen bought 75,636 shares, Paul Tudor Jones bought 31,300 shares and Jean-Marie Eveillard bought 50,000 shares, all shares were bought at the average price of $34.92, taking a loss of 24%.

The largest Guru stakeholder Chris Davis reduced his position by 11.75%, selling 1,299,540 shares at the average price of $34.92, for a 23.9% loss. He currently holds 9,758,926 shares or 5.11% of shares outstanding. Davis is a long-time stakeholder whose holding has been on a solid losing streak since the second quarter of 2011. He has averaged a 2% loss on 4,832,586 shares bought at an average price of $27.11. He’s averaged a loss of 14% on 35,533,313 shares sold at an average price of $30.89.

The second largest Guru stakeholder Jim Simons increased his position by 33.98%. He currently holds 2,057,111 shares or 1.08% of shares outstanding.

Two Gurus sold out as of the second quarter. Louis Moore Bacon held for only three quarters; he sold 50,000 shares at an average price of $34.92 for a loss of 23.9%. Ray Dalio held for nine quarters, with mild gains in only two quarters. He sold out 39,543 shares at $34.92, for a loss of 23.9% in the same quarter.

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 3.6/5 (5 votes)

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