Many data center stocks are expensive, but Iron Mountain (IRM 2.08%) is definitely not. However, is Iron Mountain a bargain, or is its legacy business going to be too much trouble for investors? In this Fool Live video clip, recorded on June 7, contributor Matt Frankel, CFP, discusses Iron Mountain's data center ambitions and what investors should know about the rest of the company's business. 

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Matt Frankel: If you're not familiar with Iron Mountain, most people know them for their paper shredding trucks that you'll see driving around cities, the mobile paper shredding service. They are the undisputed leader in document security. Their core business is they own a bunch of big storage facilities that look like Public Storage buildings. All they do is really store companies' sensitive records. If you have sensitive healthcare records that your providers have to keep in paper form, they might be housed in an Iron Mountain facility. If you have legal documents from a court case you had 10 years ago, they're probably stored in an Iron Mountain facility. They have a gigantic market share of the document storage business.

The problem is the need to store paper records is declining, so their core business is slowly but surely declining over time. Now the average box of documents that's in an Iron Mountain facility has been there for over 15 years, so it's not going to decline very fast, it's a very slow decline that we're seeing, as records gradually shift to digital.

In response to that, Iron Mountain is quietly getting into the data center space. Their thought is, "Our brand name is synonymous with document security in terms of paper documents, why not translate that brand name into the brand you can trust with digital records?" They're slowly but surely acquiring data center properties. I'm not sure if they're developing any on their own yet, but they are definitely acquiring a bunch. It's still a pretty small part of their business, and the challenge with Iron Mountain, because they're valued much, much lower than every other data center operator, because of this legacy business they have.

The question mark is, are they going to be able to grow their data center business faster than the core business of paper record storage declines? If it's yes, and they can successfully pivot to digital with that brand name, I can't think of any other data center operator that has a brand name like Iron Mountain. If they can successfully leverage that brand name, which I want to say something crazy like 95% of the Fortune 1000 use Iron Mountain facilities for their storage needs. They already have a built-in customer base. If they can replicate that success in the data center market, they could become a big player.

I'm an Iron Mountain shareholder. But if they pay something like a 7% dividend, they're valued really low, and it's because of that core business that's going to decline over time. It just is. Those are my thoughts on Iron Mountain. I like their move into data centers. I think that was really the only logical move. If you're in a company that relies on paper anything, you need to pivot to digital. I like their move, I think they need to ramp it up a little bit faster than they are, but I like their move.