Akamai (NAS:AKAM) — mrkt cap $15.4B; Price $101.8; EV/EBITDA 13.8
MORE RESEARCH NEEDED. Akamai is the largest third-party CDN network globally, with over 350,000 servers in 4,000 locations. Pioneering CDN algorithms, Akamai revolutionized the internet experience (fun fact: the only company other than CSCO that has not surpassed its ’99 peak). However, the CDN space has evolved leaps and bounds with companies like Cloudflare offering more security and edge compute solutions. Traditional content delivery is now seen as a commodity, with many companies using multiple providers and easily switching to cheaper options. Akamai has responded to this by making significant acquisitions (~2billion worth in last 4 years), building a formidable presence in higher-margin security services. They also boast some of the best CPU-driven compute capabilities among CDNs. We believe the market could be underestimating Akamai’s increasingly diversified model and growth potential beyond traditional CDN services. We are excited to learn more.
Anterix (NAS:ATEX) — mrkt cap $708mm; Price $38.11; EV/EBITDA NA
PASS. Anterix owns the 900 MHz spectrum acquired from the FCC in 2020, targeting private networks for utilities covering vast land areas. The 900mhz powered private LAN would offer strong cybersecurity protections and more robust communications, crucial as the electrical grid becomes more vulnerable to outages and emergencies (most utilities currently rely on public wifi). Despite quarterly GAAP losses, Anterix remains roughly cash flow neutral due to large upfront payments from the five contracts they’ve signed with utilities. However, their recent $250 million buyback announcement raises concerns. Given the slow adoption rate and infrastructure needs of utilities, we believe they should maintain a cash cushion and focus on dividends, making the buyback poorly timed. We are passing.
MYR Group (NAS:MYRG) — mrkt cap $1.6B; Price $98.75; EV/EBITDA 12
MORE RESEARCH NEEDED. MYR Group Inc. is a holding company of subsidiaries responsible for delivering some of the largest electrical infrastructure and commercial projects across the U.S. and Canada. Over the last several years, the company has achieved double-digit revenue growth, driven by the expansion of U.S. transmission infrastructure, which has to increase by 60% by 2030 to support clean energy initiatives like solar and wind. Despite industry tailwinds driven by the IIJA and IRA acts, MYRG is down 30% year-to-date due to labor cost overruns and rising competition in utility solar projects. Further analysis is required to assess whether these challenges are temporary and if MYRG’s project selection strategy is optimal.