During today's morning trading session, Iron Mountain took the market by storm, rocketing to $99.98 per share despite it now being above its mean target price of $86.71. This 2.2% movement implies there may not be much more room for upwards movement for the stock -- if its analysts are to be believed. They are giving the Specialty Real Estate Investment Trust stock on average rating of buy, with target prices ranging from 44.0 to 103.0 dollars per share.
We can use Iron Mountain's short interest as a proxy for determining general market sentiment regarding the stock. The short interest is the percentage of the share float that represents short positions, meaning that the investor believes the stock will decline in the future. Since IRM's short interest is 6.0%, the market sentiment is mixed on this stock.
When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.
One way to get an idea of the market sentiment on a stock is to check its rate of institutional ownership. In the case of Iron Mountain, institutional investors own 82.4% of the shares. This would indicate a positive sentiment towards the stock among institutions. What does this really tell us?
Institutional investors such as hedge funds, investment firms, and wealth managers devote significant resources to identifying good investments. If they have decided to invest in IRM, it probably means they believe it is a solid investment choice. But it could also mean they are buying up shares in an effort to acquire the company or get seats on the board of directors. Also bear in mind that institutions are fallible (just maybe not quite as fallible as the average retail investor), so they may simply be wrong when they think they've found a good stock.
In conclusion, we see mixed market sentiment regarding Iron Mountain because of an analyst belief that shares are overpriced, a buy rating, an average amount of shares sold short, and a significant number of institutional investors. At Market Inference, we believe that any investment decision should be preceded by an in-depth analysis of the company's fundamental values and a comparison with similar stocks.
Here's a snapshot of some important facts to keep in mind about IRM:
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The stock has trailing 12 month earnings per share (EPS) of $0.66
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Iron Mountain has a trailing 12 month Price to Earnings (P/E) ratio of 151.5 compared to the S&P 500 average of 27.65
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The company has a Price to Book (P/B) ratio of 1586.98 in contrast to the S&P 500's average ratio of 4.59
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Iron Mountain is a Real Estate company, and the sector average P/E and P/B ratios are 27.5 and 2.1 respectively
