Recent price: 42.95$
P/E Ratio: 47.57
3 Months Target Price: 52$
Company Description
According do the invetor's relations section of their website, Akamai® provides market-leading, cloud-based services for optimizing Web and mobile content and applications, online HD video, and secure e-commerce. Combining highly-distributed, energy-efficient computing with intelligent software, Akamai’s global platform is transforming the cloud into a more viable place to inform, entertain, advertise, transact and collaborate. Akamai is committed to delivering superior, sustained value to its shareholders.
Confidence Margins
Strong resistance $54.65 (+27%)
Light resistance $52.72 (+23%)
Light support $39.90 (-7%)
Strong support $36.69 (-15%)
Recommendation
Even if the company provided strong quarterly earnings, they proved to be very disappointing for the analysts who were on the conference call. Adding to their slump was that CISCO, a bellwether for the technology industry, came with very disappointing quarterly results for the same quarter. This temporary downturn presents investors with a great buying opportunity.
Entry strategy
For the cautious investor:
Buy the stock for 44$ or less.
For the risk-taking trader:
The May 2011 43$$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 390$ per contract.
Exit Strategy
For the cautious investor:
Sell when the stock reaches 52$, or keep it until 54$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour.
For the risk-taking trader:
The contracts should be kept until the underlying reaches around 52$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.
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