A sputtering economy, implosions at financial institutions, or just plain bad management -- on any given day, investors can name a number of reasons to sell a stock. Yet while panic is never beneficial to investors, it's good practice to play devil's advocate with investments from time to time.
In Motley Fool CAPS, more than 115,000 members have weighed in on more than 5,500 stocks, sharing bullish and bearish opinions alike.
In the case of network optimization firm Akamai
Competition. Akamai's competition in content delivery has been increasing over the years with crossover players like AT&T
(NYSE:T)and Amazon (NASDAQ:AMZN)recently joining the hunt.. And a recent increased partnership between competitor BitGravity and Tata Communications (NYSE:TCL)has some investors worried that the pairing could doom Akamai -- but not everyone. Still, many investors see new competition coming in from all sides as reason to be cautious.
Slowing revenue growth. Media and entertainment companies attempting to build Web presence and take on Apple's
(NASDAQ:AAPL)iTunes are cutting back on spending and slowing short-term growth for a large part of Akamai's revenue. Revenue growth still remains positive, but management lowered guidance for 2008, dropping the expected range by about $20 million.
Cooling sector. The recent IPO for Web-hosting player Rackspace got no love from the market, and the media content delivery networks niche has come under pressure from a weakening economic environment. Even Dell
(NASDAQ:DELL)saw weaker global demand in the current quarter, reinforcing the belief that liquidity concerns could tighten capital spending, which is not what companies such as Cisco (NASDAQ:CSCO)like to hear.
Of course, Akamai has thrived through uncertainty before. But the questions about whether the company can continue its upward run is why CAPS is such a great resource to augment your own analysis.
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Fool contributor Dave Mock uses the three-finger salute on nearly a daily basis. He owns no shares of companies mentioned here and is the author of The Qualcomm Equation. Dell is an Inside Value recommendation. Akamai Technologies is a Rule Breakers selection. Amazon.com and Apple are Stock Advisor recommendations. The Fool's disclosure policy endorses Tang as an essential part of your daily breakfast.