Iron Mountain The leader in the safekeeping of files and materials is thriving in the digital world
By Stephanie D. Smith

(MONEY Magazine) – Recent price $43

In this digital age, you would think a company that provides paper document storage would be going out of business. But thanks to the Sarbanes-Oxley Act--which, among other things, requires auditors to retain financial papers for seven years--accounting firms need a secure place to keep all this stuff. Boston-based Iron Mountain (IRM) has been in the storage business for more than 50 years, holding everything from photographs to health records to legal files in warehouses across the country. The $1.5 billion (sales) company now accounts for half of the global file-storage market. And analysts forecast that this industry is expected to grow at an 8% annual pace, reaching $3 billion by 2007.

Besides storing files and goods for clients like Bill Gates (his collection of historical photos) and 350 of the Fortune 500, Iron Mountain offers digital storage, which backs up e-mails and other electronically transmitted information. Recent acquisitions in the U.K. and Germany have made it the top document-storage firm in those markets. "All this investment is set to pay off," says Vincent Gallagher of Needham funds, which owns a total of 150,000 shares.

At $43, Iron Mountain trades for 13 times earnings before interest, taxes, depreciation and amortization charges. We think that's pretty appealing for what Morningstar stock analyst Fritz Kaegi describes as "a predictable business with very good visibility for revenue over a long period of time." --STEPHANIE D. SMITH