Trade Alert – A swap in the long-term Social Basket
Don’t forget this week’s Live Q&A chat at 2pm EST at http://tradingwithcody.com/chat. Be there or be square, even if it is hip to be square.
I’m going to make a trade in our Social Basket. My biggest position in my stock portfolios overall for the last year and a half has been Facebook most of the time as you all know. I’d also added two very tiny long stock positions in Zynga and LinkedIn, but as you’ve likely noticed I’ve lowered my rating on LinkedIn to a 6 a long time ago and I want to swap it out for a stock that I think has a much cheaper valuation and is growing just as fast. That stock is Yelp!, which is down big from its recent highs, and got smacked again yesterday.
I’m not making it a big position at all, but I’d rather be long Yelp at a $3.5 billion valuation vs LinkedIn at a $20 billion valuation. Both are trading at about 10x sales and Yelp is growing its topline faster at about 50% per year for the next year or two vs. LinkedIn clocking in at 30-40% annual revenue growth for the next year or two. So there you have it, I’m selling my LinkedIn and replacing it dollar for dollar with Yelp over the next day or two.