Time to Cash In on Akamai Gains?

I've been on the Akamai (AKAM) bandwagon for longer than any other stock I've been involved in. I wish I could tell you that what attracted me to it back when it was a single-digit puppy was some Mensa-level financial analysis, but it was not. Looking at the landscape of technology, and the lack of competition in AKAM's niche, the stock simply seemed to make sense.

The puppy has now grown into a pure-bred champ. The fundamentals still seem intact; in fact, they may be getting even better. My concern is that everyone seems to be realizing this now. AKAM has set a pattern of beating estimates in the face of skeptical analysts. Now the analysts are beginning to get in front of the company, and the bar is being raised.

For example, after having the company at a "hold" for $20+, Deutsche Bank's (DB) analyst upgraded it to a "buy" last Thursday in what almost seemed like a bearish towel toss.

With digital distribution of everything except solids now part of our daily lives, any investors who have not come around to the importance of AKAM to that process are late to the party, to say the least. AKAM will probably grow into a behemoth with time, but for my money, the current stock price already knows that.

I have a large position in this stock, and it is time to cash in a good chunk of it. That way, if the stock pulls back, I'll have something to buy without much thought.

AKAM 1-year chart:

Disclosure: Fil Zucchi may have positions in the securities mentioned in this article.

Comments

[Sam Lomeli:]

Given that the content delivery industry is still growing, what is your take on AKAM competitors like CacheLogic and Limelight Networks? The latter justed inked a deal with Amazon to deliver content for their new Unbox movie download service.

2006 Sep 18 10:11 AM