Ann: S&P DJI Announces September 2019 Quarterly Rebalance, page-7

"I'm shocked no one is even talking about this stock. "

@eric341,

It is not uncommon that some of the best-performing businesses, with proven track records of significant wealth creation for their owners, receive very little discursive attention on a forum such as this. As bizarre as that is, there are umpteen examples of it.

(Conversely, there are plenty of examples of dubious-quality companies with merely conceptual business models around which a very great deal of discussion takes place with inordinate intensity and interest.)


"What is its competitive advantage over its peers? I don't know very much about this one admittedly"

Given that I have been a Data#3 shareholder for a great many years, it embarrassing for me to admit that I still don't really know what its competitive advantage is.

Some people within the company tell me its the "culture" of the business; others say that it is management's visionary ability to always be thinking ahead of the technological curve. Yet others tell me that it is the unassailable "hook" that the company has into servicing government departments (aka, "trapdoor moat", where the clients ofDTL, once on-boarded, find it virtually impossible to leave because of the mission-critical nature of the systems that DTL is maintaining on behalf of those clients).

I suspect it is, to a greater or lesser degree, a combination of all of the above.

But whatever Data#3's secret herbs and spices, it has a long track record of working.

So, if you ever wanted the short lesson in Data#3 One-oh-One, the following charts provide it, I think:




But it is not all beer and skittles at every step of the way. There have been times in the company's history when it has had to play catch-up with tectonic shifts in the technological landscape, for example, in 2013 and 2014 when earnings were impacted as the company undertook a major re-positioning of the company in order to be able to capitalise on the industry's move to cloud computing.



But, as can be seen from the financial performance of the business subsequent to 2014, it is quite evident that it was an investment that is being rewarded handsomely.

(And it probably warrants mentioning that the majority of companies would have quite readily capitalised the expenses that were incurred for the transition to cloud services. Not DTL's management; they are not inclined to want to window-dress short term financial results, instead are quite happy and comfortable to run with conservative accounting policies and practices.)
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