NEW YORK (TheStreet) -- TheStreet's Jim Cramer thinks Yelp (YELP) is undervalued and has been under tremendous pressure as people have been taking a lot of profits amid worry about the FTC investigation. He calls Yelp "the modern-day Yellow Pages on your mobile" and would not back away from the stock.
Cramer says he was right on LinkedIn (LNKD) initially because it kept climbing, but he was wrong when he thought the stock would move past $200 after its secondary offering. He calls the stock "problematic" for him.
Finally, Cramer is against Morgan Stanley's "sell" rating on General Motors (GM) "lock, stock and barrel." He recommends the stock as a "buy" at $34. He contends the stock will re-accelerate once the hedge funds are gone. Cramer also does not want to sell Ford (F).
"We rate LINKEDIN CORP (LNKD) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity and premium valuation."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 67.1% when compared to the same quarter one year ago, falling from $11.51 million to $3.78 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, LINKEDIN CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- The gross profit margin for LINKEDIN CORP is currently very high, coming in at 87.06%. Regardless of LNKD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LNKD's net profit margin of 0.84% is significantly lower than the industry average.
- You can view the full analysis from the report here: LNKD Ratings Report
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