Wall Street Transcript Interview with Jonathan Atkin, Managing Director of RBC Capital Markets: Strong Growth Prospects for Data Centers

67 WALL STREET, New York - February 13, 2013 - The Wall Street Transcript has just published its Data Hosting Centers and Data Storage 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: Data Hosting Centers - Flash Memory - Cloud Computing Secular Trends - Internet Infrastructure Build - Big Data, PCIe Storage, Cloud Computing and the Virtual Desktop - Data Center REITs - Colocation, Managed Hosting and Cloud Computing - Data Center Expansion -

Companies include: Dish Network Corp. (DISH), DIRECTV Group, Inc. (DTV), Comcast Corporation (CMCSA), Time Warner Cable Inc. (TWC), Equinix Inc. (EQIX), Internap Network Services Corp (INAP), Digital Realty Trust Inc. (DLR), DuPont Fabros Technology, Inc. (DFT) and many more.

In the following excerpt from the Data Hosting Centers and Data Storage Report, an expert analyst discusses the outlook for the sector for investors:

TWST: How would you describe the level of investor interest in these stocks right now, and how are valuations trending?

Mr. Atkin: Of the sectors that I cover, I think data centers are top of mind for many different investor groups. You have TMT investors that are focused on stocks such as Equinix (EQIX) and Telecity (TCY.L) and Interxion (INXN) and Internap (INAP), and then REIT investors that want similar exposure can invest in Digital Realty Trust (DLR), DuPont Fabros (DFT) and Coresite (COR). Equinix, of course, is in the process of converting to a REIT.

I think the fact that there are different ways for different classes of investors to participate in this opportunity makes it an area of active interest among investors. Valuations are mixed. I think the valuations have been supported generally by fairly solid demand, too.

The REITs tend to trade at a slightly higher cash flow multiple than the non-REITs, reflecting their different investor base. CoreSite is the name that stands out among the listed REIT data center operators that saw the most notable multiple expansion, reflecting that company's ability to tap into both retail and wholesale demand.

In the wholesale space, going back to second quarter and third quarter, there was some softness in the operating results, but I think that's gradually improving. The retail space performed better overall, reflecting stronger supply/demand and pricing dynamics, with Equinix and Interxion outperforming and closing the multiple gap versus Telecity.