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How Iron Mountain Scores a Breakout in Data Storage

The stock has broken out from a six-week, cup-and-handle base.

Iron Mountain (IRM), based in Boston, provides record storage services worldwide; annual revenues are $3.5 billion, notes Leo Fasciocco, breakout stock specialist and editor of Ticker Tape Digest.

The company stores records, primarily physical records and data backup media, and provides information management services in various locations throughout the world.

Iron Mountain provides storage and information management services to legal, financial, healthcare, insurance, life sciences, energy, businesses services, entertainment and government organizations.

Its other services include information destruction services, information governance and digital solutions, compliant records management and consulting.

The stock has broken out from a six-week, cup-and-handle base. It is close to topping its all-time of $41.53 set last year.

IRM’s long-term chart shows the stock in a choppy pattern. It basically works out to a trading range between $25 and $40 since 2011. A breakout to a new all-time high would be very bullish.

IRM climbed from $34 back in July to a peak near $40 by September. The stock then put down its base. Now, it breaks through upside resistance with expanding volume. The stock’s momentum indicator is solidly bullish.

Quarterly earnings growth should show a triple-digit gain and an acceleration in growth. That is very bullish. This year, analysts are forecasting a 104% surge in net to $2.18 a share from $1.07 a year ago. Going out to 2018, the Street is predicting a 9% rise in net to $2.37 a share from the anticipated $2.18 this year.

The stock has a price-earnings ratio of 18. We see that as reasonable. We are targeting IRM for a move to $48 off this breakout. A protective stop can be placed near $38.

Leo Fasciocco is editor of the Ticker Tape Digest.

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