Ken Heebner (Trades, Portfolio) purchased a 1,240,000-share stake in Dupont Fabros Technology Inc. (DFT, Financial) in the first quarter.
Dupont Fabros Technology is a real estate investment trust that is headquartered in Washington, D.C. The company designs and operates innovative, multi-tenant, wholesale data centers. Its facilities are designed to offer highly specialized, efficient and safe computing environments in a low priced operating model. Its customers include national and international enterprises across numerous industries including technology, Internet, content providers, cloud providers, media, communications, health care and financial services.
Dupont Fabros Technology has 12 data centers that spread across 3.1 million gross square feet. The company generates revenue from leasing out its computer space and the available power to its customers under long-term leases.
Dupont Fabros Technology has a market cap of $3.43 billion, an enterprise value of $4.74 billion, a P/B ratio of 4.54 and a quick ratio of 3.70.
Heebner may have decided to purchase a stake for the following reasons:
- Technology and the data services industry are expanding at an exponential rate, and data needs to be stored somewhere. According to Dupont Fabros Technology CEO Chris Eldridge, “One of our stated goals is to be the largest enabler of cloud.”
- Dupont Fabros Technology already has 12 data centers, and it is currently developing two data center facilities with phases that are available for future development. The company is also holding three parcels of land for future development of data centers which provides further opportunity for expansion in the future.
- The company has nearly two decades of experience within the commercial real estate sector of its business and 16 years of experience building and managing data centers.
- As of Jan. 1, Dupont Fabros Technology had 37 customers with 120 different lease expirations and only 5.8% of these expirations occurring over the next two years. The company has future revenue with the potential to acquire more customers in the future.
Below is a Peter Lynch Chart for Dupont Fabros Technology.
Conclusion
Dupont Fabros Technology has multiple sources of income that it generates from its clients. Commercial real estate value is likely to rise in the future and businesses need a place to store data. Dupont Fabros Technology eliminates hassle for cloud storage by providing a service at a low cost. The company also has nearly 20 years of experience which have may have had an impact on Heebner's decision to purchase a stake.
Cheers to your investment success.
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