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LNKD) saw some strong performance last week, jumping more than 13% on the heels of -- you guessed it -- strong earnings. In many ways, LinkedIn is Wall Street's favorite social media stock; since going public, LNKD has rallied more than 150%, while the giant in the space,
FB) has barely broken even.
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That favorite status is for good reason: LinkedIn is the social network that actually makes money by helping its users do what they were trying to do when they logged in. While other social media firms earn revenue by distracting their users from what they're trying to do (and getting them to click on ads while stalking their friends, for instance), LNKD makes money by helping users with the exact task they're trying to accomplish: find a job, network or hire someone. That seems like a small distinction, but it's core to LinkedIn's ability to maximize the money it makes off of each user.
None of that is the same as saying that LinkedIn is a bargain -- it's not. The firm trades for an exaggerated multiple right now in spite of its spotless balance sheet. But that's not likely to put a hamper on LinkedIn's price action this summer, at least while the broad market remains in rally mode. That's why we're betting on shares of this Rocket Stock this week.