A 6.69% percent gain the past six weeks for shares of Akamai Technologies, Inc. (AKAM) has had the benefit of institutional support accompanying the rise. When looking for the strongest candidates for long-term upside, it can be helpful to look where big investors are wagering on upside. Betting on leading stocks with great fundamentals, great technicals and bullish institutional activity can be a great recipe for long-term investors.

Being a growth stock and residing in a leading sector, Akamai Technologies makes a strong case for bullish institutional investors. With the company's year-to-date underperformance vs. the market, we believe that the time to get interested in a stock is when institutions are signaling support. For Macro Analytics for Professionals (MAP), the strongest indicator of positive price momentum is potential institutional accumulation, which Akamai has shown recently.

Notably, over the previous six weeks, MAP has flagged five potential institutional buy signals in Akamai, which can be a precursor for further bullish price action in the future. We want to bet alongside big investors who have a favorable outlook on the company. In the chart below, Akamai stock shows a slow uptrend accompanied by increasing accumulation.

 

 

MAP's process focuses on identifying companies with healthy fundamentals accompanied by outsized unusual institutional activity to try and measure potential accumulation/distribution at the single-stock level. By studying these data points, we can hypothesize which equities institutions are trafficking in and marry this information with fundamentally sound companies. We want the odds on our side when looking for the highest-quality stocks.

Many of the best-performing stocks over the years have exhibited continual institutional support, telling a story of where big firms may see opportunity. A company like Akamai that is growing its revenues and earnings may keep institutions holding for years to come.

When deciding on the strongest candidate for long-term growth, we consider many technical areas important to success. In the case of Akamai Technologies, these considerations include:

  • Six-week outperformance vs. the overall market (+4.51% vs. the S&P 500)
  • Six-week outperformance vs. the sector (+3.12% vs. the Technology Select SPDR ETF (XLK))
  • And most importantly, institutional accumulation signals.

On top of a great technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. The areas you should consider as important for continual institutional support are:

Akamai checks the box on great technicals and fundamentals while holding one of the highest rankings in MAP's scoring process, which may point to further price momentum.

Taking a look at the overall picture of the institutional accumulation/distribution activity that we monitor for the broad market, signs recently show accumulation signals leading the charge. With the market making new highs seemingly weekly, we want to bet alongside strong stocks we believe institutions are buying.

We believe that Akamai Technologies supports a great technical and fundamental picture for stock appreciation in the years to come and could remain attractive to keep institutional investors invested. Akamai's stock has slowly been powering higher since late October, accompanied by potential institutional accumulation, and we believe that the stock has plenty more room to the upside in the coming years.

The Bottom Line

Akamai Technologies represents a potential buying opportunity for the long-term investor. Given the past six weeks of institutional accumulation signals, six-week outperformance vs. the market and residing in a strong sector, this company may continue to reward shareholders.

To learn more about MAP's institutional signals, please visit http://mapsignals.com/about-us.html.

Disclosure: The author holds no position in AKAM at the time of publication.

Investment Research Disclaimer

 

 

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