FNArena’s Weekly Insights – June 16 2025
In today’s Weekly Insights:
-Macquarie Technology’s Integrated Data Centre Services
-FNArena Talks
By Rudi Filapek-Vandyck, Editor
Small cap stocks in the US are on their worst performance relative to large-cap stocks in over twenty years with the Russell2000 index only up 24% since the beginning of 2020.
The gap with the 60% in gains achieved by the S&P500 over that period is nothing short of enormous and will have caught many investors by surprise.
There are always exceptions, of course, but the underlying trend in Australia has been similar with share market momentum in particular favouring large cap banks, technology stalwarts and AI-beneficiaries.
The FNArena-Vested Equities All-Weather Model Portfolio has benefited through the likes of Wesfarmers ((WES)), Goodman Group ((GMG)), and TechnologyOne ((TNE)), among others, but also included are some smaller cap companies that have not been able to keep up.
Time to highlight one of recent Portfolio additions that might require some patience, and why this company was chosen in the first place.
Macquarie Technology’s Integrated Data Centre Services
My first contact with what was then still called Macquarie Telecom was about twenty-five years ago. That infamous Nasdaq meltdown was still in full swing.
The then small-cap challenger telco had just issued a profit warning and my attempts to get hold of someone –anyone– for a follow-up conversation over the phone amounted to nothing.
Clearly, there was no appetite to talk to the press given the market update was a negative for the share price.
A while later I received an invitation for an in-person visit to the company’s data centre in the heart of Sydney’s CBD.
Under the stewardship of two founding Tudehope brothers, Macquarie Telecom, now Macquarie Technology, has always had an integrated approach focused on achieving the highest rates of customer satisfaction possible. One might argue it’s a feature that sticks with higher quality companies.
Something many investors in small cap companies very much like: both founders have been CEO and MD of the company since 1992.
Those investors that remained loyal to the company have enjoyed significant rewards, but equally important; this company has changed dramatically since then, and shareholders had to wait until 2014 before positive momentum got hold of the share price in a sustainable manner.
The business itself has changed dramatically. What was back then its main purpose of existence, and of corporate survival –telco services– has become but a side-show today.
