Re: Rackspace
yalanand
6/4/2011 1:55:44 AM
@Adam,
But what about the risk-reward ratio ? I am sure risk would be very high when we invest in small companies.
Re: American Tower
Adam Ritt
6/1/2011 8:49:14 AM
Priced beyond perfection for my taste. Of course, I've said that about LULU for a year now and the stock has jumped about 50 percent, so what do I know?
According to Ibbotson, since 1925 small-company stocks' compound annual growth rate has been 12.1 percent; for large-company stocks, 9.9 percent. Of course, that's over the very long term. In the shorter term there typically have been rotations between short-company and large-company performance.
Size Doesn't Matter When You Make Money
Scott
5/31/2011 5:51:12 PM
There are hundreds of men in Greenwich, CT with hotter, younger wives who agree with this headline wholeheartedly. ;-)
Interesting concept. Once would think that in order to make money, you would have to search out large, well established companies, but it seems that smaller companies are the way to go.
Re: American Tower
ProfR
5/31/2011 3:31:31 PM
Yes, there is a balance here between potential growth and what is already built into their stock prices. So do you think that Rackspace and American Tower already have the growth built into their numbers?
I recently worked on a project where American Tower took care of a good amount of site work for us, as more companies eat up spectrum and decide to build out networks, and as others expand theirs companies like American Tower will continue to do well.
A lot of this growth is driven by the trend to converge over the top services to the smart phone and other mobile devices. as long as this side of the market is growing at explosive rates expect tower companies to do well.
Re: American Tower
Adam Ritt
5/31/2011 1:31:57 PM
A lot of these companies are of definite interest. My only hesitation with some of them would be valuation. I'm willing to pay a premium for the higher growth, but my preference is to avoid P/Es above 30-35 or so.
That said, I'm really intrigued by Rackspace and American Tower as well.
American Tower
ProfR
5/31/2011 1:27:54 PM
American Tower is also an interesting choice. They had 23% revenue growth in their most recent report. They are participating in the wireless data growth related to smartphones, tables and laptops. Assuming they continue to invest capital in towers, they should also enjoy good growth.
Rackspace is a very interesting choice, i think that is one company with a lot of growth in its future. Their model will play into the game plan for many buissnesses both small and large.
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