12-month performance: +39% Insider activity: Bearish Selling pattern: Large sale from CFO Recent news: Good Q1 results
Akamai Technologies is a provider of content delivery network services and cloud security solutions. Through its security platform, the company helps organisations protect customers, employees, web applications, DNS services, and data. It is listed on the NASDAQ Global Select Market and currently has a market capitalisation of $18.7 billion.
Akamai shares have enjoyed a good run in 2020, rising more than 30%. The stock has been driven higher by good first-quarter results in April – in which revenue was up 8% and non-GAAP earnings per share were up 9% – as well as a number of price target hikes from major brokerages. Improved sentiment towards cyber security stocks in the wake of Covid-19 has also helped push the technology stock higher.
What stands out to us here is that Akamai CFO Edward McGowan recently offloaded a large number of shares. On 30 June, the insider sold 4,758 shares at a price of $107.01 per share, reducing his holding by 35%. He has since sold another 3,710 shares through automated transactions. In total, the insider has sold $932,000 worth of AKAM stock in less than a month. This suggests that McGowan – who is likely to have a good understanding of the company’s near-term prospects – sees limited upside to the share price right now. Given this large insider sale, and the fact that other Akamai insiders sold stock in May and June, we think caution is warranted towards Akamai shares right now.
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