Out Fox The $treet

After the close last night, Verizon Communications (VZ) agree to buyout Terremark WorldWide (TMRK) for $19. The stock closed just above $14 yesterday providing for a 35% pop today. TMRK was one of the larger holdings in the Opportunistic portfolios so that initially gave those portfolios a nice pop today. Unfortunately the market has become overly worried about a little disturbances in Egypt and the market has sold off since the opening. Did we learn anything from Greece? The main reason we're excited about this offer from Verizon is that TMRK was on the list of stocks to sell. TMRK has had a huge gain over the last year due to its cloud offerings and growth. Unfortunately though they continue to borrow money to open new centers and lack actual profits. Considering the path to profits leads us to at least 2012, this investment had become extremely risky. Its interesting that VZ claims the deal will have no impact on earnings in 2011. Possibly TMRK is so small that any impact ...

More good news from Terremark Worldwide (TMRK) on landing the Federal Communications Commission (FCC) for their Enterprise Cloud platform to support its strategy to leverage cloud computing, including the agency's plan to host its web site in the cloud.  This is yet another sign how the governments need to cut budgets either forces them or makes it more likely that they'll move more services online and ultimately into the cloud. Where they might have been more reluctant in the past to outsource into the 'cloud' it now makes economical sense and the lower costs are out ruling any concerns on security.  TMRK is a proven government provider and a leader in the federal market. Look for more and more government agencies to move not only online but to the cloud via TMRK. FCC.gov is yet another feather in their hat.  TMRK remains a core holding of the Opportunistic Portfolios including the Long Only and Levered.  Terremark’s highly secure Infrastructure-as-a-Service (I...

Terremark Worldwide (TMRK),  a leading global provider of managed IT infrastructure services,  continues to report strong growth for their data center space. TMRK reported 22%YoY growth and 8% sequential growth. Also important is that growth is accelerating with only 20% growth in the prior quarter. EBITDA grew at 27% YoY and 19% QoQ showing that margins are starting to expand as TMRK is reaching critical mass and improved utilization rates.  TMRK also upped guidance for fiscal Q3 and FY 2011 as the outlook continues to improve including growing international demand including Brazil and Amsterdam. Cloud revenue has now grown to a $30M run rate and more then double last years run rate. While still below 10% of total revenue, it continues to grow at a fast clip and will become a more important part of the story. Another important part of the story is the interest expense load. TMRK reported a $6M operating profit this quarter, but faced $14M in interest expenses. From ...

Equinix (EQIX) is down over 30% today due to meager revenue shortfall of roughly 2%. Since EQIX is a competitor of Terremark Worldwide (TMRK) which is a prime holding of the Opportunistic and Growth portfolios it's worth checking out the potential collateral damage. TMRK is down around 5% today on back of this negative news from EQIX. Oddly though the news from EQIX isn't all that bearish considering they were able to boost EBITDA numbers and possibly half of the revenue issue comes from an acquisition that hasn't worked out as well as expected. Should TMRK be down on this news? Probably considering the run recently, but in no way should be news make an investor of TMRK throw in the towel. Higher EBITDA numbers are more important then revenue. Not to mention that TMRK isn't stuck with a bad merger deal. Nortia Research has a good article on the warning (as the market sees it though they also guided up) so I won't waste my time repeating the details on EQIX. Our...

How did I forget Terremark Worldwide (TMRK) on previous post discussing 52 week high stocks in our portfolios. TMRK is a leading investment in both the Opportunistic and Growth Portfolios. Ironically this stock hit a 52 week high back in August, then sold off big time. Whether this will be a breakout this time or eventually fail is still up for debate. TMRK is caught up in the 'cloud computing' craze as it is a prime provide of cloud services in its data centers. Its interesting to note that Rackspace Hosting (RAX) is also breaking out today which has been unusual for these 2 stocks to trade in tandem. So much for the market trading in a herd and stock picking going out the window. RAX on the other hand hasn't broken its high from the beginning of the year. Its a much bigger company so potentially TMRK is being seen by the market has a takeover candidate. Both stocks and especially TMRK has become overbought and likely needs to take...

Even though this market is adverse to risk, money is still jumping into some of the high flying techs such as SalesForce.com (CRM) or Priceline.com (PCLN) Last night CRM reported a strong earnings report that beat estimates by some 7%, but the stock trades at over 70x next year estimates. Solid report, but does it really suggest the stock is worth buying? It doesn't to us, but that doesn't keep the stock from going up. CRM is a homerun from a corporate standpoint as they are taking over the online CRM market. Unfortunately everybody has caught onto this story and the stock has soared. As usual though the market tends to trade in a heard leading to a handful of stocks hitting absurd valuations. We'd rather see investments in say Riverbed Technology (RVBD) or Terremark Worldwide (TMRK). Both have similar growth patterns and will benefit from the new move to online CRM systems and cloud computing. In fact all 3 companies have growth rates for the next 5 years in the 20%+ r...

Its amazing how much impact analysts have these days. After the frauds in 2000 and the common thought on the street that the process is rigged, its amazing how many people still wildly follow the moves of analysts. Now with the widespread dissemination of information by the internet its even more preposterous that stocks swing wildly based on a upgrade or downgrade by sometimes randomly never heard of analysts. The prime example the last week or so is Terremark Worldwide (TMRK). After earnings on the 4th, it appeared that TMRK was headed for a major breakout with strong growth forecasted and the every important cloud computing offering showing sizzling growth. Stock jumped to recent highs of $9.25 the next day. Then, out of the blue an analyst downgrades the stock and it swoons the following day. On Monday, Wells Fargo hits it again and before you can even read the first report the stock is down some 20% after a solid report. Whats amazing is that nothing earth shattering was highlight...

Demand in the technology sector continues to be questions. Everybody is so concerned that the cycle has peaked in the semi sector. Some of this is understandable after the Dot Com crash in 2000 and the Great Recession in 2008. Still demand seems to be building for new applications like mobile internet, 3D tv, and cloud computing. Several of the stocks in our portfolios like Teradyne (TER), TerreMark Worldwide (TMRK), and Riverbed Technology (RVBD) should just be soaring on the Insatiable Bandwidth demand from all these new products. Still only RVBD has broken out but that took explosive earnings. Interesting clip from the Xilinix (XLNX) CEO on Mad Money . He does a good job of pushing back on the cycle peak. We're just 1 year out of the Great Recession so it seems unthinkable that the tech sector has already peaked. Many a company like TER and XLNX have been posting numbers that match or equal the peaks of 2000, but their stocks lanquish. These could be big winners over the next 5 ...

After consolidation in the $7 - $8.5 range since the beginning of the year, TerreMark Worldwide (TMRK) has finally broken above $8.8 a level they've struggle at a few times this year. Its now testing the 52 week high of $8.98 seen in late January. TMRK is a core holding of our Growth and Opportunistic Growth portfolios. TMRK is our prime cloud computing investments and the move of the government to the internet. They provide managed information technology (IT) solutions with data centers in the United States, Europe, and Latin America. It delivers a suite of managed solutions, including colocation, managed hosting, managed network, disaster recovery, security, and cloud computing services.

In the middle of last week, technology stocks seemed about to become technically broken. A lot of the stocks we follow had broken major technical support and were in danger of serious damage. As of this afternoon, the following stocks we own in the Opportunistic and Growth Portfolios turned very bullish. Each one has now cleared the 20/50/200EMAs. Of course, it helps that the SP500 cleared the 200MA which is very bullish, but the tech sector seems ready to lead the market highers. These stocks have strong balance sheets and hence avoid any of the issues regarding debt concerns and funding. Instead they can focus on the strong growth in the developing economics and a rebound in the US. They all have some overhead resistance and still need to prove they can clear recent tops before the all clear is sounded. Riverbed Technology (RVBD) - strong WAN optimization company that got upgraded yesterday with a $32 target. Not a big jump from these levels but this company continues to preform at ...

After the close, Terremark ( TMRK ) announces a dela with Verizon Business, unit of Verizon ( VZ ) to utlize 25,000 sq/ft in the Miami and Virgina data centers. At first glance this seems like a significant deal for TMRK, but no financial terms were released. The main reason given for the win is that TMRK has data centers that meet or exceed federal standards and Verizon Business has a thriving business with the governemnet. Anybody following us knows that our big reason for buying TMRK originally was its connection to the governements movement on the internet. As part of the agreement, Verizon will utilize 25,000 square feet of colocation space at Terremark’s world-class NAPs in Miami, Florida and Culpeper, Virginia that are designed to meet or exceed federal government standards for data communications and hosting facilities requiring stringent guidelines for power and cooling redundancy. “When looking at the federal space, Terremark has clearly distinguished itself as a leader in pr...

After the SP500 touched just below the 200EMA at 1046, Stone Fox Capital used the roughly 7% cash we had accoummulated from selling US Steel (X) a few weeks back to become fully invested. The portfolio has only $4500 left in cash so we'll likely look to trim a few positions on a solid bounce in the market next week. A huge oversold market (at one point down 4.7% in less then 2 days) creates a great entry point for adding to positions. Added to our positions in some extremely oversold stocks such as Foster Wheeler (FWLT), Terex (TEX), Puda Coal (PUDA), Phoenix Companies (PNX), and to a couple of stocks still in strong positions Local.com (LOCM) and Terremark Worldwide (TMRK). Most of these stocks will likely bounce the hightest, but if they stall at key technical levels on the way up that will trigger selling these purchases. Some charts like FWLT, TEX, and PNX are clearly broken. They all have 14 day RSI sub 30 and CCIs in the -160 range. For example, TEX has been down 14 of the l...

Terremark ( TMRK ) reported basically in line numbers. The most exciting number is the revenue bookings were up 24% YOY and at record highs. Booking growth rates continue to exceed revenue growth of 17% YOY. Added whitehouse.gov to the federal pipeline and continue to see record bookings in the current quarter. Also, expanding into Brazil (adding 5k sf with Yahoo as first customer) and Istanbul due to customer demand. The stock continues to be a buy based on the move to cloud computing and the online push of the federal government. Just don't see many companies with a 24% increase in bookings these days. Santa Clara datacenter is online for Q4 opening with customers like Akamai and Shutterfly already signing contracts. Total revenues for the quarter ended September 30, 2009 were $69.8 million, representing an 17% year-over-year increase EBITDA, as adjusted, was $18.0 million for the quarter, representing a 82% year-over-year increase Income from operations was $6....

Good news for one of our favorite stocks that has been lagging of late. Competitor Switch and Data Facilities (SDXC) got a buyout offer from Equinix (EQIX) last night providing nearly a 30% premium for the share price of SDXC. In addition, EQIX beat earnings estimates by 57% providing more support for investing in TerreMark (TMRK). Remember, Stone Fox Capital invested in TerreMark Worldwide because it has a great connection with the Federal Govt and VMWare (VM) making it our top pick in the sector. The news from EQIX suggests that the sector as a whole is improving dramatically from last year. Details on the merger : entered a definitive agreement for Equinix to acquire Switch and Data in a transaction valued at approximately $689 million in cash and stock, based on yesterday’s market close. The combination of the two companies will further strengthen Equinix’s leadership position in the global data center services market by extending the company’s p...

One way to play the ever growing government reach under the Obama administration is to invest in internet companies that are helping the governments promise under Obama to be more transparent and internet centric. TerreMark (TMRK) fulfills that role as the Data Center operator that now runs some of the biggest government sites such as data.gov . The stock is also on sale after being hit 15% after reporting a strong Q2 with revenue and EBITDA a the high end of estimates. Its the 2nd time the stock appeared ready for a major breakout only to be hit by major selling. The last time was in early July when fears of internet security issues sent its stock plummeting. TMRK is highly leveraged like the typical data center/telecom provider of the 2000 era. It takes a lot of capital to buildout the data centers and thats been know different with TMRK. They recently completed a $420M debt offering. Thus they provide the opportunity to invest in a high risk leveraged play just as the economy is com...

Not sure their is much news today other then a technical breakout. Competitor SVVS had better then expected earnings today so maybe this move is just follow thru combined with a great market today. TMRK continues to be a favorite of StoneFox with there strong ties to this govt that is making a huge push to the internet. Wouldn't chase here, but we definitely aren't selling anytime soon.