A Bullish Outlook on the Network-Dense Colocation Space: Industry Expert Todd Weller Discusses His Favorite Picks with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - May 15, 2013 - The Wall Street Transcript has just published its Internet Services Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Increased Mobile Content Traffic - Chinese Online Monetization Trends - Internet Infrastructure and Services Consolidation - Social Networking Economics -

Companies include: Amazon.com Inc. (AMZN), Rackspace Hosting, Inc (RAX), Cortex Pharmaceuticals Inc. (COR), Equinix Inc. (EQIX), Digital Realty Trust Inc. (DLR), Microsoft Corporation (MSFT), International Business Machine (IBM), VMware, Inc. (VMW), DuPont Fabros Technology, Inc. (DFT), Oracle Corp. (ORCL), Tibco Software Inc. (TIBX), F5 Networks Inc. (FFIV) and many more.

In the following excerpt from the Internet Services Report, an expert analyst discusses the outlook for the sector for investors:

TWST: You cover a few different segments related to the Internet sector - data centers, hosting, cloud computing. About which are you most bullish at the moment, and why?

Mr. Weller: Yes, we remain most bullish on network-dense colocation, because it is a beneficiary of various secular drivers like mobile, cloud, growth of Internet, social media, etc., and it's been - you're kind of making a play on the broad cloud theme as opposed to, you know, making a play on a single service provider, and then again I would emphasize the higher barriers to entry in that area.

And so shares of Interxion, INXN, a European network-dense colocation provider, remains our top pick, and we continue to remain positive on Equinix, EQIX, as well.

We also continue to be positive on the wholesale data center, because we do see positive drivers for data center sector in general and feel like sentiment around that area, it remains lukewarm. Demand has picked up there. Tomorrow we get results from Digital Reality Trust, so they are an interesting bellwether, and then I put managed and cloud hosting as least attractive at the moment.

This is not to suggest that it is not an attractive industry, but our view here is really focused on our views of Rackspace, as they are currently the only publicly traded pure-play hosting companies. For Rackspace, there are currently uncertainties with respect to how to think about sustainable growth and the competitive issues we've discussed.

TWST: You have a "hold" on Rackspace. What are you hesitations about the stock right now and what could be potential catalysts for an upgrade?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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