I uploaded this video of John Shepherd running a 7.97s quarter mile in a street legal Eagle Talon. This car is probably one of the fastest DSM’s on the planet, and easily one of the fastest street legal cars as well. John Shepherd runs a transmission building service out of Ohio, and has a website where his transmissions can be purchased, called sheptrans.com. Enjoy!
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At market close today, Akamai Technologies closed down nearly 19%, going from $47.18 at opening to a dismal $38.27 at the closing bell. According to the press release, revenue is up 52%, and GAAP net income up 92%, year over year. And yet, their stock dropped 19% on this news. Something isn’t right.
In an article on Fool.com, it mentions possible reasons for such a significant drop in price. The article states “bottom-line results didn’t beat the Street’s expectations. Second, Akamai didn’t raise guidance. And third, free cash flow declined year-over-year.”
It seems that the market reacted to the fact that the company did not meet earnings expectations, and that their on hand cash declined significantly. These events may warrant a significant drop in price, but do they really?
Further investigation reveals that the expenditure in on hand cash seems to be in infrastructure, something that is not cheap for a major internet backbone like Akamai. What better place than to be spending money than in developing the infrastructure to support future demand. The article mentioned above goes on to talk about broadband penetration world wide, and states that “If it’s fair to assume that broadband Internet access is a global certainty, and that less than one-seventh of the world’s population has broadband … Akamai’s long-term opportunity remains, at worst, vast.” I could definitely agree that this statement seems true.
One last thing. Did I mention the price to earnings of this stock is around 100 after the price drop? Even after the drop, the price to earnings ratio is not looking pretty. Despite what you may read about this stock, its hard to say that it would be a knock out buy. The price looks good because it is trading very near a 52 week low, but, will it recover? What kind of money will need to be spent on the part of Akamai to in order to serve that percentage of unserved potential broadband customers? Questions like these are what makes this a gamblers game. Would I buy? Probably, but not very much. I know you have to bet big to win big, but its that winning big part that always seems to elude me.
The admin of this site and author of this post, Jon Steege, is not a financial analyst or a stock broker. He would love to “bet big” on Akamai, to reap the reward, but money like that doesnt grow on trees. As always, Jon has no direct financial position in any stock he mentions, he is simply a speculative observer.
After reading the dismal report that AT&T managed to sign up “only” 146,000 new subscribers for the iPhone, Apple’s stock started spiraling downward in the days before it released its quarterly earnings report. The street was abuzz with people speculating that Apple couldn’t move the iPhone as predicted, and according to AT&T’s records, the proof seemed to be in the numbers. That was Monday.
Today, July 25th, Apple released its quarterly earnings numbers after the bell, and melted people’s faces off with their numbers. According to an article on BloggingStocks.com, Apple earned investors $.20 a share ABOVE expectations for the quarter. I know $.20 is something you generally pick up on the street, but when you own 5.5 million shares, as Steve Jobs does, well, you can just mess around with the decimal place to see what kind of money that is.
If ever there was an example to show that doing as much research as possible is a good thing, this would be it. Mr. Yared, who wrote the Bloggingstocks.com article mentioned above, said it best “The iPhone became available the evening of June 29th and the quarter ended June 30th–30 lousy hours of activation time for AT&T.” This shows that the hype surrounding the lack of activations reported by AT&T was just an overreaction to some seemingly pretty strong data. I did not catch this fact either, and thought a few friends who are apple holders would be in for some sticker shock when their stocks dropped as a result of the iPhone release, rather than go up as they expected. I was wrong, and it seems that because of this date discrepancy, Apple may be able to report more of their iPhone earnings in the next quarter as well. The price to earnings ratio is still out of my league, but here is to hoping that all who do own Apple stock get to see yet another stellar earnings report later on this year.
The admin of this site and author of this post, Jon Steege, is not a financial analyst or a stock broker. He is a Computer Scientist with a knack for data analysis. He has always marveled at Apple’s stock, but has never had the opportunity to invest in it. As always, Jon has no direct financial interest in any stock he mentions, he is simply a speculative observer.