Post a CommentAs you have hopefully seen, I will be closing 1 trade this morning, on LNKD and P. As you can now guess, it’s not about closing a long on LinkedIn but rather about not wanting to keep that short Pandora short for too long. To date, it’s been a great year of trading as the average long & short trade has returned around 8%. The year is still young though so I won’t celebrate anytime soon. Truth be told, even year end isn’t really time to celebrate given the fact that it’s right back at square 0 afterwards:)
As will be the case all year, my long & short stock picks will be available to see in my live spreadsheet:
http://www.intelligentspeculator.net/livetrades
You can see the numbers for both companies involved in today’s trade here:
| Ticker | Name | Price | Dividend Yield | Payout Ratio | Ex-Dvd |
|---|---|---|---|---|---|
| WIN | Windstream Holdings Inc | 9.1 | 10.99 | 250.77 | 6/26/2014 |
| DO | Diamond Offshore Drilling Inc | 51.6 | 6.78 | 88.69 | 7/31/2014 |
| FTR | Frontier Communications Corp | 6 | 6.67 | 362.42 | 6/11/2014 |
| CTL | CenturyLink Inc | 34.84 | 6.2 | #VALUE! | 5/30/2014 |
| ESV | Ensco PLC | 50.75 | 5.91 | 36.9 | 6/12/2014 |
| RIG | Transocean Ltd | 42.85 | 5.23 | 63.79 | 5/28/2014 |
| HCP | HCP Inc | 42.2 | 5.17 | 106.92 | 5/8/2014 |
| T | AT&T Inc | 35.76 | 5.15 | 53.13 | 7/9/2014 |
| KMI | Kinder Morgan Inc/DE | 32.74 | 5.13 | 138.48 | 7/31/2014 |
| HCN | Health Care REIT Inc | 63.54 | 5 | 3110.77 | 5/8/2014 |
| TE | TECO Energy Inc | 17.91 | 4.91 | 96.66 | 5/9/2014 |
| NE | Noble Corp plc | 30.94 | 4.85 | 25.2 | 8/7/2014 |
| MO | Altria Group Inc | 39.89 | 4.81 | 81.43 | 6/13/2014 |
| RAI | Reynolds American Inc | 55.94 | 4.79 | 78.66 | 6/11/2014 |
| SO | Southern Co/The | 44.49 | 4.72 | 107.36 | 7/31/2014 |
| TEG | Integrys Energy Group Inc | 58.56 | 4.64 | 61.88 | 5/28/2014 |
| PBCT | People's United Financial Inc | 14.32 | 4.61 | 87.67 | 7/30/2014 |
| ETR | Entergy Corp | 73.13 | 4.54 | 83.11 | 5/13/2014 |
| DRI | Darden Restaurants Inc | 49.11 | 4.48 | 64.09 | 7/7/2014 |
| VZ | Verizon Communications Inc | 47.39 | 4.47 | 51.73 | 7/9/2014 |
| ED | Consolidated Edison Inc | 57.03 | 4.42 | 67.89 | 5/12/2014 |
| PM | Philip Morris International Inc | 85.34 | 4.41 | 67.71 | 6/24/2014 |
| PPL | PPL Corp | 34.36 | 4.34 | 79.79 | 6/10/2014 |
| VTR | Ventas Inc | 66.98 | 4.33 | 164.06 | 6/6/2014 |
| FE | FirstEnergy Corp | 33.42 | 4.31 | 245.23 | 8/5/2014 |
| DUK | Duke Energy Corp | 73.52 | 4.24 | 82.38 | 5/14/2014 |
| LO | Lorillard Inc | 58.38 | 4.21 | 69.92 | 5/28/2014 |
| PNW | Pinnacle West Capital Corp | 54.66 | 4.15 | 60.31 | 7/31/2014 |
| PCG | PG&E Corp | 44.86 | 4.06 | 100.61 | 6/30/2014 |
| SCG | SCANA Corp | 52.25 | 4.02 | 60.3 | 6/6/2014 |
| PCL | Plum Creek Timber Co Inc | 44.06 | 3.99 | 135.51 | 5/14/2014 |
| POM | Pepco Holdings Inc | 27.14 | 3.98 | 245.45 | 6/6/2014 |
| AEE | Ameren Corp | 40.62 | 3.94 | 75.81 | 6/9/2014 |
| KIM | Kimco Realty Corp | 22.93 | 3.92 | 174.48 | 6/30/2014 |
| CNP | CenterPoint Energy Inc | 24.47 | 3.88 | 114.15 | 5/14/2014 |
| IRM | Iron Mountain Inc | 27.8 | 3.88 | 213.91 | 6/18/2014 |
| MAT | Mattel Inc | 39.34 | 3.86 | 55.2 | 5/21/2014 |
| XEL | Xcel Energy Inc | 31.24 | 3.84 | 58.43 | 6/17/2014 |
| SPLS | Staples Inc | 12.55 | 3.82 | 44.26 | 6/25/2014 |
| MAC | Macerich Co/The | 65.01 | 3.81 | 208.32 | 5/7/2014 |
| AEP | American Electric Power Co Inc | 53.36 | 3.75 | 64.46 | 5/7/2014 |
| PEG | Public Service Enterprise Group Inc | 39.62 | 3.74 | 58.57 | 6/4/2014 |
| KRFT | Kraft Foods Group Inc | 56.26 | 3.73 | 45.05 | 6/26/2014 |
| WMB | Williams Cos Inc/The | 43.52 | 3.7 | 222.62 | 6/4/2014 |
| FCX | Freeport-McMoRan Copper & Gold Inc | 34.07 | 3.67 | 84.82 | 7/10/2014 |
| LEG | Leggett & Platt Inc | 32.67 | 3.67 | 87.71 | 6/18/2014 |
| GAS | AGL Resources Inc | 53.5 | 3.66 | 70.93 | 5/14/2014 |
| CMS | CMS Energy Corp | 29.78 | 3.63 | 59.69 | 8/6/2014 |
| CINF | Cincinnati Financial Corp | 49.02 | 3.59 | 52.22 | 6/16/2014 |
| COP | ConocoPhillips | 76.89 | 3.59 | 41.66 | 5/15/2014 |
| CVC | Cablevision Systems Corp | 17 | 3.53 | 122.86 | 5/13/2014 |
| OKE | ONEOK Inc | 63.73 | 3.51 | 114.41 | 8/6/2014 |
| IGT | International Game Technology | 12.56 | 3.5 | 32.74 | 6/17/2014 |
| PFE | Pfizer Inc | 29.96 | 3.47 | 57.68 | 5/7/2014 |
| GME | GameStop Corp | 38.15 | 3.46 | 37.21 | 5/22/2014 |
| GM | General Motors Co | 34.75 | 3.45 | 0 | 6/6/2014 |
| INTC | Intel Corp | 26.17 | 3.44 | 46.56 | 8/7/2014 |
| EXC | Exelon Corp | 36.24 | 3.42 | 73.55 | 5/13/2014 |
| CVX | Chevron Corp | 125.36 | 3.41 | 34.89 | 5/15/2014 |
| STX | Seagate Technology PLC | 50.51 | 3.41 | 28.18 | 5/12/2014 |
| WM | Waste Management Inc | 44.11 | 3.4 | 696.94 | 6/10/2014 |
| SE | Spectra Energy Corp | 39.6 | 3.38 | 79 | 5/7/2014 |
| NU | Northeast Utilities | 46.62 | 3.37 | 59.45 | 5/28/2014 |
| PAYX | Paychex Inc | 41.49 | 3.37 | 83.78 | 5/8/2014 |
| D | Dominion Resources Inc/VA | 71.16 | 3.37 | 72.88 | 5/28/2014 |
| CA | CA Inc | 29.66 | 3.37 | 48.48 | 6/9/2014 |
| DTE | DTE Energy Co | 77.93 | 3.36 | 68.53 | 6/12/2014 |
| AVB | AvalonBay Communities Inc | 138.24 | 3.36 | 932.94 | 6/30/2014 |
| GRMN | Garmin Ltd | 57.48 | 3.34 | 60.31 | 6/13/2014 |
| LLY | Eli Lilly & Co | 58.88 | 3.33 | 44.89 | 5/13/2014 |
| CSCO | Cisco Systems Inc | 22.96 | 3.31 | 33.16 | 7/1/2014 |
| GE | General Electric Co | 26.58 | 3.31 | 53.11 | 6/26/2014 |
| AIV | Apartment Investment & Management Co | 31.47 | 3.3 | 335.82 | 5/14/2014 |
| CAG | ConAgra Foods Inc | 30.35 | 3.29 | 52.55 | 7/30/2014 |
| EQR | Equity Residential | 60.79 | 3.29 | #VALUE! | 6/19/2014 |
| ABBV | AbbVie Inc | 51.36 | 3.27 | 76.99 | 7/9/2014 |
| PSA | Public Storage | 171.93 | 3.26 | 105.02 | 6/11/2014 |
| WEC | Wisconsin Energy Corp | 48.02 | 3.25 | 56.96 | 5/12/2014 |
| CLX | Clorox Co/The | 87.31 | 3.25 | 60.06 | 7/21/2014 |
| LMT | Lockheed Martin Corp | 165.12 | 3.22 | 52 | 5/29/2014 |
| PLD | Prologis Inc | 41.19 | 3.2 | 288.82 | 6/9/2014 |
| MCD | McDonald's Corp | 101.14 | 3.2 | 55.5 | 5/30/2014 |
| F | Ford Motor Co | 15.74 | 3.18 | 22 | 7/28/2014 |
| PG | Procter & Gamble Co/The | 81.7 | 3.15 | 56.75 | 7/16/2014 |
| SYY | Sysco Corp | 37.19 | 3.12 | 65.99 | 7/2/2014 |
| COH | Coach Inc | 43.39 | 3.11 | 33.73 | 6/4/2014 |
| HAS | Hasbro Inc | 55.52 | 3.1 | 72.88 | 7/29/2014 |
| GIS | General Mills Inc | 53.01 | 3.09 | 46.79 | 7/7/2014 |
| WU | Western Union Co/The | 16.27 | 3.07 | 34.72 | 6/12/2014 |
| PEP | PepsiCo Inc | 85.91 | 3.05 | 51.2 | 5/28/2014 |
| KMB | Kimberly-Clark Corp | 110.23 | 3.05 | 58.08 | 6/4/2014 |
| IP | International Paper Co | 45.88 | 3.05 | 41.05 | 5/23/2014 |
| OXY | Occidental Petroleum Corp | 94.7 | 3.04 | 34.9 | 6/6/2014 |
| MCHP | Microchip Technology Inc | 46.76 | 3.04 | 214.95 | 5/20/2014 |
| DOW | Dow Chemical Co/The | 49.36 | 3 | 34.44 | 6/26/2014 |
| MRK | Merck & Co Inc | 58.63 | 3 | 116.53 | 6/12/2014 |
| KO | Coca-Cola Co/The | 40.76 | 2.99 | 57.85 | 6/12/2014 |
| SPG | Simon Property Group Inc | 174.05 | 2.99 | 112.09 | 5/14/2014 |
| LYB | LyondellBasell Industries NV | 93.66 | 2.99 | 29.3 | 8/14/2014 |
| SYMC | Symantec Corp | 20.1 | 2.99 | 0 | 5/22/2014 |
Again, the trend looks terrible for LNKD and I generally stay away from companies that have such numbers. I am a believer in LNKD though and do think they will turn this around.
CRM Revenue (Quarterly YoY Growth) data by YCharts
Long LinkedIn (LNKD)
I’ve been a long time believer in LNKD but have never been able to make it a long term holding because the valuation never made sense. It has come down mostly on growth concerns but not enough for me to buy outright. I do like to buy it on a long & short basis though because I do think that LNKD has done a good job of diversifying its revenue sources and that some of the concerns have been overblown. It makes little sense for example to look at y/y traffic to its website (which has been declining) without considering use of its mobile apps in a world where everything is moving towards mobile. I do think that LNKD is a no-brainer when I compare it to a stock such as CRM which is trading at a comparable valuation.
Next earnings release: May 2nd 2014
Short Salesforce.com (CRM)
I’m certainly a believer in cloud-based software and I do think Salesforce has a terrific business but the results have lagged in recent years and it’s difficult for me to see how CRM would warrant such a valuation. When I look at diluted EPS (normalized) for the past few years, here is what I see:
2011: $0.12
2012: ($0.01)
2013: ($0.31)
2014: ($0.39)
Needless to say that things are not going in the right direction. They’ll eventually turn things around I believe but until there are clear signs that it will happen, I can’t imagine buying CRM at its 80 forward P/E.
Next earnings release: May 23rd 2014
Disclaimer: Long LNKD and no positions on Salesforce (CRM) but I will initiate the trade on the open today
