Limelight Networks, Inc. (LLNW)

High insider ownership and strong financials

going to 5

This account tracks the performance of newly minted 4 star stocks - 3 star stocks that recently turned in to 4 star stocks.

Cash on hand, no debt. IPO that has fallen out of favor.

GS owns 1/3 of the company

Got my attention when I was researching Akamai (which is also in my portfolio). They could be a big player (possibly VERY big) in the next wave of high density (read:TV/video) content delivery over the internet. With mobile internet emerging as possibly the most exciting tech phenomenon since the internet itself and the soon to be released $99 iPhone and amazing Palm Pre as well as the growth of services like Hulu, this could be huge. PE is a bit heavy and if I were buying this stock for real, I would probably wait for a 5-10% pullback which I think we will get.

late stater, fast moving

Apple recently tapped Limelight to be its second content delivery network. It's already begun delivering certain software updates through limelight. When apple works with a company, it's because that company generally has great potential at a terrific price.

This will pop within a couple years.

testing top 12 1yr gainers

I believe content delivery has substantial growth potential. I'm a big believer in IP TV. For me it's not there today, but as soon as a product like Apple TV has live streaming sports along with the right selection of TV shows and movies I will turn off my Comcast service. The multi-media experience potential of IP TV is amazing to me. For instance, you could potentially mix and match audio and video feeds to customize your entertainment experience. Imagine being able to pick your audio feed to go along with the game you are watching. It may be much more interesting to listen to a couple of guys commenting in their living room over the broadcasters on traditional TV.

I was also very impressed by the last earnings call. The tone of the executives and the moves being made to gain customer commitment and build long term relationships is very refreshing. In my experience, most executives do not think this way.

In my book a huge potential market along with management that understands how to forge customer relationships is a killer combination.

valid competitor to AKAM, which is the premium priced player in CDN space, but every market needs a good number two player than can compete on basis of price

It's all in the clouds.

The web is going to be video, and Limelight is in a great place to be to host it.

Limelight Networks, Inc. is a content delivery partner enabling the next wave of Internet business and entertainment. More than 1300 Internet, entertainment, software, and technology brands use the companies robust, scalable platform to monetize their digital assets by delivering a brilliant online experience to their global audience.

LLNW has a wide range of clients including Microsoft, Amazon and Facebook. LLNW has grown their revenue the last three years from $21.30 million in 2005 to $64.34 million in 2006 to $103.11 million in 2007.

LLNW has $194.67 million in cash, cash equivalents and short-term investments on the balance sheet with no long-term debt. We believe LLNW is undervalued at its market cap around $279 million.

LLNW has shown signs of being hugely cash flow positive on an operating basis. The company's cash flow on an operating basis has improved each of the last three years from $2.47 million in 2005 to $6.29 million in 2006 to $25.0 million in 2007.

LLNW also could be a buyout candidate. LLNW just broke through its 50-day moving average at $3.08 on two times average volume. Its chart is shaping up very nicely for a move.

I worked in two other CDN companies and we always were trying to catch up with Limelight. LLNW is a solid CDN with a solid customer base--they are not going anywhere but up espeically since they are at a 52 week low. I keep buying more the more it goes down. I started buying at 6!

AKAM patents hold - LLNW files for bankruptcy within 1 year!

buy out bails me out early but the CDN space is not shrinking...

getting back on track... market of future

Content Delivery is hot. These guys have knocked down some big names and are hurting Akamai a little - so worth having a little bit of LLNW and a bit more of AKAM to balance each other out. LLNW has been pounded nearly every day since its IPO and that has to be a little rash.