Covestor manager Targex Capital uses proprietary computer algorithms designed to own ten to twenty stocks. Its system only trades in high volume NASDAQ stocks that have met all requirements of technical indicators. Targex has a very short hold time, typically within 1 to 15 days.
Targex was established in 2009 by Kelvyn Walker who graduated from Florida State College with a degree in Computer Information Systems and has been trading for 11 years.
Targex manages Covestor’s Identifying Turning Points model, which attempts to identify turning points in the pricing of individual securities. Current top holdings include Whole Foods Market Inc (NASDAQ: WFMI), Biogen Idec Inc (NASDAQ: BIIB) and Urban Outfitters Inc (NASDAQ: URBN).
On April 29, Targex added Akamai Technologies, Inc. (NASDAQ: AKAM) to the model. AKAM provides services for accelerating and improving the delivery of content and applications over the Internet; ranging from live and on-demand streaming video capabilities to conventional content on Websites, to tools that help people transact business and reach out to new and existing customers.
On April 27, AKAM reported its first quarter 2011 financial results, with these key points:
- First quarter revenue of $276.0 million, up 15 percent year-over-year
- GAAP net income of $50.6 million, or $0.26 per diluted share, up 24 percent year-over-year
- Normalized net income* of $72.2 million, or $0.38 per diluted share, up 9 percent year-over-year
- Board of Directors authorizes $150 million expansion of share repurchase program
Zacks noted that this topped consensus estimates, with potential opportunities in cloud computing and strategic partnerships tempering increased competition in the space:
Akamai Technologies, Inc. reported first quarter 2011 earnings of 29 cents per share, beating the Zacks Consensus Estimate by two cents. The upside was driven by strong revenue and margin expansion in the quarter.
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We maintain our Neutral recommendation on a long-term basis (6-12 months) due to higher capital expenditure and increasing competition from large companies, such as Level 3 Communications Inc. (NASDAQ: LVLT) and Limelight Networks, Inc. (NASDAQ: LLNW).
However, we believe increasing usage of cloud computing technology, higher adoption of value-added solutions, aggressive share repurchase, strategic partnerships, commerce security and online video are positives for the stock over the long term.
The Bedford Report also noted the intense competition in the sector:
In the last year companies within the content delivery sector are becoming more relevant as the internet world rapidly expands and data intensive websites like YouTube.com or Netflix become increasingly popular. A shift in demand to the data segment of diversified communications companies has taken place. Large companies are exceeding their data capacities, and the need for a third party ‘host’ has become necessary.
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Competition is fierce is the content delivery sector and several companies have made steps towards significant deals in recent months in order to strengthen market share.
Sources:
“Akamai Reports First Quarter 2011 Financial Results” Akamai Technologies Press Release, 4/27. https://finance.yahoo.com/news/Akamai-Reports-First-Quarter-prnews-955704812.html?x=0&.v=1
“Akamai Tops Consensus” Zacks Equity Research. Yahoo Finance, 4/28. https://finance.yahoo.com/news/Akamai-Tops-zacks-3762066788.html?x=0&.v=1
“Level 3 and Akamai Turn to the Cloud to Boost Revenues” The Bedford Report Press Release. Yahoo Finance, 4/27. https://finance.yahoo.com/news/Level-3-and-Akamai-Turn-to-iw-997703547.html?x=0&.v=1
