Wednesday, February 15, 2006

Should I roll that AKAM Call

AKAM Feb 25 Call expires in 3 days, should I roll it as current 25.10.
  1. May or may not be called, but I want to make decision, not let market make it.
  2. Capital Gains, when did I buy? 27/07/2005 so to far, but should consider Aug Calls, to see.
  3. Is call for entire holding, ie will I still profit in any further upside? Yes entire 500.
  • Mar Call credit - .80. or $385 Net, for 30 days on $25 OR 3.2%, annual 38%
  • May Call credit - 1.85, 93 days, 7.4%, annual 29%
  • Aug Call credit - 2.7, 184 days, 10.8%, annual 21%
Go for Aug Call, as if price rises substantially can buy back option after 27/07 and sell shares with capital gain concession.
If share neutral then made 21% annual return.
If share falls can buy back option for cheaper and sell share, so limits downside risk.

Down side little participation in upside, need to investigate further to decide on upside potential.
The figures are:
P/E (TTM) 48.88 P/Sales 13.38

P/E (Forward) 35.31 P/Cash Flow 45.73

Earnings/Share (EPS) 2.2 Book Value/Share 4.11

PEG 1.35 P/Book 6.07

Debt/Equity 0.32 Cash Flow/Share 0.55

Yes AKAM is a cash machine with digital delivery. Digitial delivery is gonna explode, but Google is about to pounce and all it takes is one hiccup for price to slide.

Sell AUG Call, look to sell March Put.

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