Akamai And Cheniere CEOs Are Buying Shares Of Their Companies

• CEOs of a cloud services provider and a liquefied natural gas company have made bets on their companies recently.


• In fact, one of those chief executives has been on a buying spree this summer.


• Year-to-date, shares of one of them is up handily while the other is essentially flat.

Uncertainty ahead of the Federal Reserve's decision not to raise the federal funds rate just yet failed to dissuade the chief executive officers at Akamai Technologies, Inc. AKAM or Cheniere Energy, Inc. LNG from adding to their stakes in their own companies in recent days.

The big difference between these two stocks is that the cloud services provider is trading in the same neighborhood it was at the beginning of the year, while the liquefied natural gas company is up nearly 20 percent year-to-date. Both are still well down from their 52-week highs of almost a year ago.

Conventional wisdom says that insiders and 10 percent owners really only buy shares of a company for one reason -- they believe the stock price will rise and they want to profit from it. Insider buying can be an encouraging signal for potential investors, particularly during volatile periods.

Akamai

Akamai CEO Frank Thomson Leighton last week scooped up more than 19,000 shares of the content delivery provider at $51.36 per share. That purchase totaled almost $1 million. His stake was up to more than 3 million shares on last look. Also note that a director and an executive together sold more than 30,000 shares this month.

One analyst recently made the case that this Massachusetts-based company would be forced to cut prices. Akamai has a market capitalization near $9 billion. It offers no dividend. Short interest is about 7 percent of the float. The share price has retreated more than 2 percent in the past month and closed at $52.43 on Thursday, above the CEO's purchase price. The Nasdaq is less than 2 percent higher in that same period.

See also: Penske Automotive And Wisdom Tree CEOs Make Big Bets On Their Companies

Cheniere

This week, Cheniere President and CEO Jack Fusco purchased more than 35,000 shares of the Houston-based energy company. At $42.78 per share, that cost him almost $1.5 million. Note that he has been buying shares periodically throughout the summer, while some other insiders have sold shares.

The market cap at Cheniere is more than $10 billion, though it does not pay out a dividend either. Its short interest was about 8 percent of the float in the most recently reported period. Heavy options action on Thursday did not do much for the share price, which closed barely up to $44.48. But that price did make Fusco's most recent buy look well timed.