Strong Call option buying in Akamai Technologies (AKAM) on
Friday is a positive sign for the company. Most of the buying was in the front
month of September with some additional buying in the October Calls noted.
Unusual Call Volume
Technologies rallied on Friday along with the market 4.78% while the Call
options for September saw unusual volume for the strike prices of 25 and 30,
both above the current share price. These options have until the 19th
of September to pay out. The volume at the 25 Strike price was 24,000 contracts
while the volume at the 30 Strike price was 12,200 contracts. October also
looked attractive to some investors with 5,400 contracts at 25 and 2,300
contracts at 30 traded. All the volume numbers are much greater than normal trading
services to accelerate the delivery of content over the Internet. The company
is expected to grow earnings 17.6% this current quarter and 25% for the year
compared to last year. Expectations have fallen recently on the earnings front
but overall the numbers remain decent. Revenue growth for the current quarter
is around 21% year over year, with 24.3% revenue growth expected for the yearly
totals. The trailing P/E ratio for the stock is at 33.01 which compared to the
earnings is not cheap but about par.
was beaten down at the beginning of August and has made a nice bottom formation
starting to break out of a pattern to the upside. You could go long Akamai for
a period of time based on the chart breakout and the unusual options activity.