Tuesday February 19, 2013
by Mike Cintolo, editor Cabot Top Ten Trader
Our current favorite might prove to the be the #1 leader among growth stocks. It’s LinkedIn (LNKD), which soared after its latest earnings.
The stock has all the characteristics of past big market winners, and after its recent huge breakout, it’s looking like a flag-bearer for this bull move.
The company’s story is just as enticing as it was the day it came public — it’s revolutionizing the multi-billion dollar recruiting and talent acquisition industry, and is in fact becoming the standard for big companies. And the firm’s fourth- quarter report lconfirmed that’s the case.
Revenues and earnings continued their torrid growth pace, and all of the sub-surface metrics were impressive as well.
Its members totaled 202 million at year-end (two new members are signing up per second!), unique visitors to its website grew 26%, page views reached an all-time high and non-U.S. revenue continued to expand and now makes up 38% of all revenues.
The reason those aforementioned page-view statistics are meaningful is because LinkedIn is becoming sort of a professional online portal, where millions go every day to check on business news that relates to them.
And that’s paying off; while the firm’s Talent Solutions division is the main attraction (more than half of revenues, and up 90% from a year ago), its marketing division grew 68% and made up more than a quarter of all revenues.
All told, LinkedIn is set to get much, much bigger in the quarters and years ahead, and could even see an added boost should the global economy (and, hence, hiring) pick up steam.
Technically, LNKD rose into the $120 area last April, and that basically acted as a ceiling for the stock. The recent breakaway gap actually took LNKD out of a huge base that dates back to its IPO from 21 months ago.
If you don’t own any, consider buying a small position around here or on a pullback of a few points, with a stop in the $130-$135 area.
Learn more about this financial newsletter at Mike Cintolo's Cabot Top Ten Trader.