reversal, page-5

From Under the Radar Small Caps (edited pretty heavily - you can sign up for a free trial if you want the full story)

At its current share price, you can purchase Macquarie’s shares on a forecast PE of 8.5 times and a yield of 3.5 per cent. This is a company whose earnings are forecast by Bell Potter to grow at more than 15 per cent a year for the next two years – this is even after the cost of constructing another data centre.

To fund its capital expenditure, it has cash on its balance sheet of over $50 million and strong operating cash flow – in fiscal 2012 it was $37.2 million.
If you give this company a discount of 10 per cent to its peers, you find that its valuation rises to $12.90 a share, 58 per cent premium to the current price.

Aidan and David Tudehope founded the company in the early 1990s and own about 61 per cent. They run it based on their vision of growth arising from the need for companies to outsource their computing needs, and of course the need for the “cloud”, which really only refers to data centres with loads of servers and heaps of air conditioning.

MAQ has been in the telco space since the 1990s, first as a reseller, and then in the aftermath of the tech-wreck in 2000 moving into data centres, or hosting. Macquarie bought a data centre near Sydney’s Central Station, and is busy building another in Sydney’s Macquarie Park for about $60 million.