October 23, 2008
Our other special focus this week is on Internet Infrastructure. We spoke with analyst Rodney Ratliff of Stanford Group Company about his top picks in this space during this turbulent time for the markets:
- Akamai Technologies (AKAM)– “ My favorite stock right now, the one I picked for our monthly focus list, is Akamai. You are talking about a company that is generating ridiculous amounts of free cash flow. In the most recent quarter, Akamai generated $70 million in cash flow from operations. In terms of free cash flow, in fiscal year 2008, I am projecting that they are going to generate about $158 million in free cash flow…So in terms of self-funded status and the ability to weather even a prolonged downturn, I think we are looking at a winner here, especially considering the stock’s trading now near a five-year low.”
- Equinix (EQIX)– “The appeal there is simple. Content has gotten so dense, and so bandwidth intense, and is only going to get more so…Equinix can provide for customers a data center with a massive footprint that features the availability of 250 or so network providers in any given individual data center, 24/7 support and very effective ventilation and air conditioning to keep equipment running optimally. The biggest appeal is the availability of a wide selection of networks providers, which enable the client to bid network providers against each other which improves cost of operation. So it comes down to build versus buy.”
For the complete internet infrastructure report, including the full interview with Mr. Ratliff, and other analysts giving a fuller picture of investment opportunities in this space, click here.
