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Forget about Black Friday. Cyber Monday is where it's at nowadays. The biggest shopping weekend of the year is subtly shifting its weight toward the tail end, as American consumers start to figure out that the best deals are found online -- often with free shipping and no sales tax, to boot. It's a brave new retail world.
And that's where Akamai Technologies
The whole story
But retail traffic isn't the only key to Akamai's tasty profits. This company is forever on the bleeding edge of the most bandwidth-hungry Internet applications it can find, sticking a finger in as many juicy traffic pies as possible.
Oh, the irony!
Even as Akamai ushers you into cyberspace on your hunt for digital entertainment and awesome sales, the company itself is probably the best deal you can find today.
The stock has arguably become extremely cheap. Its shares have a habit of selling for about 20 times EBITDA, but now they cost only a little more than 6 times that amount. The company generates hundreds of millions of dollars of free cash flow. And its closest competitor is tiny Limelight Networks
Akamai's future in a crystal ball
The world is going online in greater numbers every year, and our collective demand for the latest and greatest online content puts a huge strain on this global data network. While network operators are laying down thicker pipes all the time, it seems unlikely that more fiber and copper alone will be enough to satisfy this ravenous bandwidth hunger. Akamai provides another approach to solving that eternal crisis: squeezing more efficient use out of the networks we already have. Put the two approaches together, and the Net will be all right.
It doesn't matter how you look at Akamai's story. From a financial standpoint, the company is growing sales and widening profit margins. In a fundamental light, its balance sheet looks stable enough to support a skyscraper. And with a hard-boiled business mindset, you'll see that the company has built a wide moat around a business idea that promises to stay valid and very profitable for decades to come. You really should own Akamai.
Take action today!
What's not to love? If you agree, please mosey on over to our Motley Fool CAPS service and give Akamai a thumbs-up rating, as 95% of around 2,400 players have done before you. Feel free to add your own take on this brilliant stock while you're at it -- or tell me off in a scathing post that points out all the flaws in my logic. We'll all be richer for your involvement.
Microsoft and Best Buy are Motley Fool Inside Value recommendations. Google and Akamai Technologies are Motley Fool Rule Breakers picks. Best Buy and Apple are Motley Fool Stock Advisor selections. The Fool owns shares of Best Buy. Try any of our Foolish newsletter services free for 30 days.
Fool contributor Anders Bylund owns shares in Akamai and Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like. The Motley Fool is investors writing for investors.