LinkedIn Corp (LNKD): The Simple Reason Why Jim Cramer’s Bullish

Page 1 of 2

LinkedIn  Corp (NYSE:LNKD) has been a darling on the markets ever since its IPO a couple years’ back, and it has beaten all analysts’ expectations every single quarter, including the most recent one. However, during Friday’s trading, the stock has gotten battered and beaten for one of the few times since the IPO, and the suggestion is that the company game weak guidance on the current quarter, which was weaker than some pessimistic analysts might have forecast.

LinkedIn Corp (NYSE:LNKD)

The news overall wasn’t just good for LinkedIn Corp (NYSE:LNKD), they would be considered blockbuster. Earnings by the company quadrupled over the same period a year ago, and overall revenue doubled. So why is the stock down 10 percent on the basis of hose news?

And if the entire market is selling on LinkedIn Corp (NYSE:LNKD), why is CNBC’s Jim Cramer so darn bullish in the wake of all the red numbers on the board?

Simple overreaction, he said Friday.

“I have here, in my hand, a 15-page brief in favor of a fabulous forward look for LinkedIn,” Cramer said, “and there are two lines, two lines in this conference call that have destroyed this stock today. And I say that they (LinkedIn executives) are doing ‘UPOD’; This is UPOD.

They are underpromising, and they will over-deliver. I want to buy LinkedIn. … This is the only negative. Page after page after page (of good). I refuse to be tied down by that one line. I like LinkedIn.”

So there you go. It’s important to point out that from a valuation standpoint, LinkedIn is actually around one-fifth as expensive as social media rival Facebook Inc (NASDAQ:FB), and while they operate in different spectrums of the digital world–the former’s career-oriented while Facebook is more socially minded–there’s simply no explanation why investors should favor FB so much.

A valuation discount like LinkedIn Corp (NYSE:LNKD) currently has against Facebook would be warranted, if, for example, it had a higher dependency on advertising dollars to meet its total revenue expectations, but in fact, the opposite is true. It’s estimated that about 85% of Facebook’s revenues come from ads, while 30% of LinkedIn’s are derived from the medium.

Does this make logical sense? No, so it’s easy to agree with Cramer here. Mr. Market should be a buyer, and retail investors shouldn’t let short-term fear drive their behavior.

Are you a “one-liner” when it comes to LinkedIn Corp (NYSE:LNKD), or are you a big-picture investor who sees the growth in the company and the stock? Are you a buyer or seller of LinkedIn? Give us your thoughts in the comments section below.

See Cramer’s comments in video form on the following page:

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!