Stocks in the News: LinkedIn, Teradata, Adidas

Posted: May 04, 2013 12:01 AM

Welcome to John Ransom's Stocks In The News, where the headline meets the trendline.     

Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis.              

Stock number one is:             

LinkedIn Corporation, (SYMBOL:  LNKD) and the headline says:        

LinkedIn Earnings: Profit Soars, but Shares Fall on Weak Outlook--WSJ Online   

LinkedIn, the world’s biggest online professional-networking service, reported a good first quarter.  However, the company announced downward revisions to its second quarter and full-year revenue estimates, disappointing Wall Street.  LinkedIn appears to be trailing in mobile advertising growth, which was a catalyst to Facebook’s upside earnings surprise this week.

Wall Street previously expected LinkedIn’s earnings to rise 53-55% per year over the next three years.  The PE is 135.       

There is price support at $180, and then again at $170.   Shares have risen rapidly, and shareholders should use stop-loss orders to protect profits.        

Our Ransom Note trendline says:  STAY ON THE SIDELINES.    

Stock number two is:            

Teradata Corp., (SYMBOL: TDC) and the headline says:           

First Quarter ‘13 Worse, but Pipeline Growing – Morgan Stanley Research

Data-Storage company Teradata Corp. reported a disappointing first quarter, with lower revenues.  Gross margins are suffering as large deals are expected to close later in the year and earnings are currently derived from lower-margin service businesses.  However, the revenue pipeline looks attractive.          

Earnings are projected to grow in the low single digits this year.  The PE is 16.3.

Teradata shares have lost two years of price gains in recent months, falling toward price support at $48 today.  Impatient investors should consider selling on a bounce up to $55.          

Our Ransom Note trendline says:  STAY ON THE SIDELINES.                

Stock number three is:          

Adidas, (SYMBOL:  ADDYY ) and the headline says:     

Adidas Net Beats Estimates as Profitability Widens to Record  --  Bloomberg      

“Adidas reported first-quarter profit that beat estimates and said its gross margin widened to a record, sending the shares to the highest level ever,” reports Bloomberg.  The company is on track to exceed its operating margin goals for 2013.    

Adidas also had upside revenue surprises in North America and Latin America.  We previously reported that Adidas plans to attain first place in the running shoe market in the U.S., within five years.  Citi Research says, “…Adidas is one of a small group of genuine global growth apparel retailers and brands that is capable of GDP-plus revenue growth.”       

Earnings are projected to be down 10% this year, then climb 19% and 55% in the next two years.  The PE is 12.8.  On March 11, we told investors to buy Adidas.  The company is achieving revenue and margin goals, and the chart is bullish.      

Our Ransom Note trendline says: BUY ADIDAS.