WRKO>Audio & Video on Demand>>Alex Zhao (Morningstar, EQIX)

Alex Zhao (Morningstar, EQIX)

Jan 10, 2018|

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

This segment of the financial exchanges brought to you by the leader bank if you're looking to diversify your portfolio. Precious metals are Smart investment in gold and silver bullion coins. Now available all leader bank locations call 8776917900. Log on to leader bank dot com for more information. Member FDIC. Al exact Zhao from morning star joins us now here to do little bit of stock talking Alex thank you for joining us. Kendrick very happy to be on call. Else will tell what are we talking about your desire. Sure well we're talk about equipment is actually our favorite communication. Infrastructure play is the largest recount is it has and a platform in the world. And it's funny that you mention about Amazon before in our view that it would it is actually one of the beneficiary from at a price out and second probably to Amazon. So it's basically in the in the history. Equipment deciding what Amazon. To really benefit from trying to at a press out. So what is it what exactly did they do do they operate data centers is that is that what I gather. Exactly opera data centers and and it. Key differentiators that they have a broad ecosystem on site. Political ought to public out on site including Amazon and Google and all that and on major network carriers would help a client on African activity. As a result they can charge premium price or at a price too cold Kate on their site because they outlawed. They have a lot of public how options and also carrier connectivity option. Now if I'm looking at this correctly they're organized as a real estate investment trust is that right. What what does that mean as far as how this stock tends to move in regards to the rest of the market. Typically you're running for re this. You know they're sensitive to interest rates but I would argue that in this Kay Hayes equipment the next few weeks that. Q do you long term secular world trend that's gonna go on for a lot of over the next decade to know our opinion we think at a press caused the distressing Ernie. Is that the stock is trading at 445 right now and are there about 500. Do they have facilities all throughout the world or is it primarily US based. And as for all the world. And what they're doing right now period spending in all three regions you know America has an out of Asia packed off to Europe the what they're doing is that they're buying up the strong data centers in each country so they just bought one in Turkey. Also last year to actually audited that are from Verizon and the what's amazing to us is that they're able to turn around and generate 60% ebitda margin on the Verizon data that are that they ought to. Which is far more profitable than what Verizon had operated though both stated and been. What's the potential downside to this company in what in what situation do things not work out for them. Church that's a great question I think you know does this. Certainly a high risk named that we have a high risk rating or I think the long term downside. Is really if Amazon wants beginning to recount it as a essentially Emma don't want opened up its own Amazon does have its own data center right now with only four. For as. Amazon cloud AW that but that'll already wanna get in the retail business that our own mean. We don't data that are around the globe and there'll be a long term risks and short term misery you know operational risk and also acquisition risk but in our opinion I think the company has been. In pretty crude and in terms of buying data batters. Rolling up to its platform at a ripe. Or go to Alex thank you very much of the time we appreciate you joining us today. Thank you Al gel for Morningstar talking about equal knicks with a ticker EQ. I acts.