Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a momo momentum 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 $349.6 million.
- LNKD has a PE ratio of 563.0.
- LNKD is currently in the upper 30% of its 1-year range.
- LNKD is in the upper 25% of its 20-day range.
- LNKD is in the upper 35% of its 5-day range.
- LNKD is currently trading above yesterday's high.
- LNKD has experienced a gap between today's open and yesterday's close of 2.1%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on LNKD:
LinkedIn Corporation operates an online professional network. LNKD has a PE ratio of 563.0. Currently there are 15 analysts that rate LinkedIn a buy, no analysts rate it a sell, and 14 rate it a hold.
The average volume for LinkedIn has been 2.2 million shares per day over the past 30 days. LinkedIn has a market cap of $18.0 billion and is part of the technology sector and internet industry. The stock has a beta of 1.78 and a short float of 4.4% with 2.24 days to cover. Shares are up 71.6% year to date as of the close of trading on Tuesday.
rates LinkedIn as a
. Among the areas we feel are negative, one of the most important has been premium valuation based on our review of its current price compared to such things as earnings and book value.
Highlights from the ratings report include:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Internet Software & Services industry and the overall market, LINKEDIN CORP's return on equity is below that of both the industry average and the S&P 500.
- This stock has increased by 95.16% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- The gross profit margin for LINKEDIN CORP is currently very high, coming in at 86.95%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, LNKD's net profit margin of 6.96% significantly trails the industry average.
- Net operating cash flow has significantly increased by 64.24% to $103.83 million when compared to the same quarter last year. In addition, LINKEDIN CORP has also vastly surpassed the industry average cash flow growth rate of 13.23%.
- You can view the full LinkedIn Ratings Report.