Trade-Ideas LLC identified

LinkedIn

(

LNKD

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified LinkedIn as such a stock due to the following factors:

  • LNKD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $231.4 million.
  • LNKD has traded 432,060 shares today.
  • LNKD is trading at 3.53 times the normal volume for the stock at this time of day.
  • LNKD is trading at a new high 4.05% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on LNKD:

LinkedIn Corporation, together with its subsidiaries, operates an online professional network worldwide. Currently there are 12 analysts that rate LinkedIn a buy, no analysts rate it a sell, and 15 rate it a hold.

The average volume for LinkedIn has been 2.6 million shares per day over the past 30 days. LinkedIn has a market cap of $17.5 billion and is part of the technology sector and internet industry. The stock has a beta of 1.31 and a short float of 3.1% with 2.37 days to cover. Shares are down 41.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates LinkedIn as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Internet Software & Services industry average, but is greater than that of the S&P 500. The net income has decreased by 7.7% when compared to the same quarter one year ago, dropping from -$42.55 million to -$45.83 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.
  • Looking at the price performance of LNKD's shares over the past 12 months, there is not much good news to report: the stock is down 33.99%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • LINKEDIN CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, LINKEDIN CORP reported poor results of -$1.29 versus -$0.13 in the prior year. This year, the market expects an improvement in earnings ($3.42 versus -$1.29).
  • The gross profit margin for LINKEDIN CORP is currently very high, coming in at 86.34%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -5.32% is in-line with the industry average.

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