Stock Spotlight: Iron Mountain
Good stocks in good industries go together like chocolate and peanut butter. While either one is often treat enough on its own, when the two are put together, the result is often more than just the sum of its parts.
Iron Mountain [IRM@IRM], the subject of our Stock Spotlight for this week, is yet another example of how PowerRatings can help investors find those two great tastes that taste great together. Iron Mountain, a member of the Business/Management Services industry, has earned a PowerRating of 9
— just like the industry group it hails from.
A 9-rated stock in a 9-rated industry is truly something investors should pay attention to
— and look for when searching for stocks to add to an investment portfolio. Stocks with PowerRatings of 9, based on our research examining thousands and thousands of simulated trades since 1995, have been higher one year later more than 79% of the time.
Compare this to the average stock, which is higher one year later less than 68% of the time.
In addition to this “reliability” factor, 9-rated stocks have another advantage over the average stock. Our research shows us that stocks with PowerRatings of 9 have also tended to gain more than 18% in a year’s time. By contrast, the average stock since 1995 has gained between 12 and 13% after one year.
As I mentioned at the beginning, Iron Mountain is a part of the Business/Management Services industry. This industry, like Iron Mountain, has a PowerRating of 9. 9-rated industries are particularly good stock “neighborhoods” in which to look for stocks, especially high PowerRating stocks like Iron Mountain. Why? Because our research into industry groups tells us that, since 1995, industries with PowerRatings of 9 have returned, on an average annualized basis, 24.07%.
The average industry, by way of comparison, has provided average annualized returns of 14.61%–several hundred basis points lower than the 9-rated industry.
Iron Mountain is in the business of information protection and storage
— an increasingly vital service. The company provides a variety of products and services ranging from records management to data protection and “information destruction” to industrial, government and corporate markets, as well as to small and home office businesses.
The company has been a busy acquirer, buying three companies since October 2007 in order to expand both its business capacities as well as to gain deeper access to markets such as hospitals and the film and sound industry. Iron Mountain trades at a P/E of 43.60 and is within 12% of its 52-week high at $38.85.
Iron Mountain is the highest-rated stock in the Business/Management Services industry. But there are six other high PowerRating stocks, all with PowerRatings of 8, that are also a part of this industry.
Those stocks are:
Choicepoint [CPS@CPS]
Express Scripts Inc. [ESRX@ESRX]
Corporate Executive Board Company [EXBD@EXBD]
Fidelity National Information Services [FIS@FIS]
Ritchie Brothers Auctioneers [RBA@RBA]
R.R. Donnelley & Sons [RRD@RRD]
Stay tuned for more on these stocks in tomorrow’s discussion of top industries in our PowerRatings (for Industries) section.
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