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Technology Could Lead the Markets Higher

David Becker
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Akamai Technologies, Inc. (NASDAQ:AKAM) provides content delivery and cloud infrastructure services for accelerating and improving the delivery of content and applications over the Internet in the United States and internationally.

Prices moved lower at the beginning of the third quarter after Verizon’s recent decision to buy out Edgecast which could potentially shake up the content delivery network industry and increase competition for the market leader, Akamai. The main concern for investors is the growing trend of customers and partners looking to gain more control over their ecosystem by building their own content delivery network.

The 52-week range of AKAM is $ 32.64 – $53.61, which puts the stock near the middle of the 52-week range. The quarter over quarter earnings per share increased 32%, while the three year growth rate of earnings increased 12%. Sales increased 15% quarter over quarter and the three-year growth rate of earning increased 16%. The company has no debt, and a profit margin of 32.5%.

Recent insider buying makes the stock look attractive. Chief Executive Officer Thomson F. Leighton acquired 25,000 shares, paying $45.28 per share for a total amount of $1.13 million. These shares were purchased indirectly through a trust. Director George H. Conrades acquired 20,000 shares, paying $44.95 per share for a total amount of $899,100. Mr. Conrades increased his stake by 2.06% to 993,007 shares with this purchase.

The technical outlook is stable and is poised to break higher. The stock has dropped nearly 15% since hitting its 2013 highs in the beginning of the fourth quarter. Momentum is robust with the MACD (moving average convergence divergence) index printing in positive territory with an upward sloping trajectory. The RSI is printing near 51, which is in the middle of the neutral range.

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