by Travis Johnson, Stock Gumshoe | September 18, 2009 1:11 pm
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Source URL: https://www.stockgumshoe.com/2009/09/september-idea-of-the-month-akamai-clever-and-maybe-cheap-too/
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Good stuff. This is a tweener. “Fair value”? Probably but it is also under performing in a favored sector and is working on its second sell signal. Monthly momentum just turned negative which is a bad sign. If you buy it, try to get it below 18.00 and buy 17.50 puts to protect the position. If it punches below 16.50 you should give serious consideration to liquidating and moving on to something else with a scrape on the shin instead of a broken leg (if you get me). If you’re not defensive with this stock it will probably hurt you.
But I really like your idea of waiting until the earnings release (end October) and buying on a dose of bad news. I’d still protect the position with puts but there’s nothing like buying low if you expect to sell high.
LLNW has already done what you don’t want to see happen (but which may be imminent) in AKAM. It has broken through its support line as of a month ago. It is now in a down trend. I’d avoid this stock for now.
In the internet sector the stock I REALLY like is IIJI. It is fairly valued, trades options, pays a dividend and is in an uptrend. If it pulls back to 4.75 – 5.00 I’ll buy it with both hands. Other internet sector stocks to watch due to their relative strength are EGOV, CYBS, COI and BGCP in no particular order.
Remember, it’s not so much what you buy. It’s having the patience, discipline and skill to buy it at the right time.