Buy LinkedIN (LNKD)

Successful IPO


Last Thursday LinkedIn had an incredibly successful IPO.  Shares were originally offered for a price of $45, and by the end of the day were trading for around $94 (an increase of over 100% in a day!).

From 9:30am until 4:00pm, I watched all the "experts" on CNBC proclaim that LNKD shares were overvalued.  The funny thing was that the share price just kept on rising!  The "experts" were left scratching their heads.

The Business


LinkedIn is emerging as the most powerful recruitment database in the world.  A growing number of college graduates, including myself, create professional LinkedIn profiles in order to help themselves get jobs.  Below, you can follow a link to my personal LinkedIn profile:

http://www.linkedin.com/pub/michael-caligiuri-de-jesus/33/4b1/b38

Why is LinkedIn so popular?  Like Apple products, LinkedIn is more user-friendly than its competitors.  It was incredibly easy for me to make a LinkedIn profile on the internet, and it is even easier for recruiters to find me.  In addition, LinkedIn enables users to create a "network" of people.  This network can include anyone that is willing to accept you as a connection.  For example, my connections include my two sisters and my friends from the University of Michigan.  This network will also expand to my current and past employers.

What LinkedIn has that every company in the World wants is INFORMATION.  For example, LinkedIn knows where I am from, where I studied, who I know, and where I have worked.  In order for a recruitment department of a company to efficiently sort through this information, they must pay for access to it.  This internet access to recruitment information helps companies cut down on costs and increase production, which in turn will turn the recruitment industry upside down.

Another huge revenue stream for LinkedIn is selling advertising space.  Because LinkedIn has so much access to my information, they know exactly what type of ads to show me while I am updating my profile.  For example, I have seen many ads for internship positions at financial institutions that I would love to work for.  This serves as a great way for companies to efficiently market to their target audience.  In this way, LinkedIn is much like Google.

Below is a Video Explaining LinkedIn.  If you are receiving this via email, please click this link.

Google All Over Again


When Google's IPO came out with a market capitalization of 27 billion dollars, all the "experts" were kicking and screaming that Google was way too expensive and overpriced.  Well, Google is now worth over 170 billion dollars.  The "experts" were dead wrong.

In order to distinguish whether or not LinkedIn is overpriced, it is important not to look at current financials but instead to look at future potential.  LinkedIn has already begun to revolutionize the talent recruitment industry, and I highly recommend to hop along for the ride.

Dollar Cost Averaging


LinkedIn will no doubt be a volatile investment.  Some days it will decrease in value a lot, and some days it will increase in value a lot.  Because of this, I recommend dollar cost averaging.  This is when you stagger your investments.  For example, if you plan to invest 1,000 dollars in LinkedIn, stagger your investments over a three month period.  Invest 333 dollars now, 333 dollars a month from now, and 333 dollars two months from now.  This will help you account for crazy price swings by averaging out your purchase price.

Buy Vera Bradley (VRA)

The Business


Vera Bradley (VRA) is a top designer of handbags and other accessories for women.  Of course, what makes this company successful is that it has a name brand.  Similar to other successful fashion stores, like Louis Vuitton and Coach, Vera Bradley is able to leverage its name brand to successfully charge high premiums for its products.

Vera Bradley has created a very interesting niche in the fashion market.  In simple terms, Vera Bradley is able to consistently produce the new fad.  More specifically, Vera Bradley consumers anxiously await Vera's new product releases so that they can have the newest and coolest accessories.  Furthermore, Vera has somehow moved beyond merely being a product designer, and has created a club-like culture within its customer base.  Just imagine Regina George and her possy walking down the hallways in the movie "Mean Girls" with matching Vera Bradley handbags.

Unlike many other name brand designers, Vera's handbags and accessories are actually affordable.  This not only increases Vera's customer demographic, but it is another factor that influences customers to make repeat purchases.  Below are some pictures of the fashionable Vera Bradley products:



Financially Strong


Vera Bradley looks very impressive through a financial lens.  With profit margins and operating margins of over 13% and 22%, respectively, Vera clearly shows that it is making very good money off of its affordable product portfolio.  Furthermore, Vera has proven that it can grow its business very effectively by increasing sales by over 26%.  Not surprisingly, expectations are high as the market expects Vera to increase earnings by 23% per year over the next five years.

Valuation


Shares of Vera look expensive right now with a price to book ratio of 31 and PE ratio of 40, however the shares are expensive for a reason.  For investors who are in it for the long run, I recommend to buy shares of Vera Bradley.  Because of their strong branding and customer loyalty, I can see Vera being a multi-bagger for investors over the next 5-10 years.

Hansen Medical (HNSN) the Next Big Winner?

Dr. Frederic H. Moll


Here are some quick facts about Dr. Moll:

• Co-Founder of Intuitive Surgical (ISRG)
• Director of MAKO Surgical (MAKO)
• Co-Founder of Hansen Medical (HNSN)

For more on Dr. Frederic H. Moll, click here.

Below you can see the share price performance of both ISRG and MAKO (all from Yahoo! Finance).

Above shows you a 1,732% return since 2002

Above shows a 317% return since 2009

Three Apples From the Same Tree:

ISRG, MAKO, and HNSN are all basically the same thing (at least to an investor).  All three companies have patents for robots that perform surgeries with better precision and accuracy than anything else on the market.  Even better, the surgeries performed by the robots are both very common and very expensive!  The quality of the robots, combined with the commonality and price of the surgeries, lead to huge profits, which in turn lead to great profits for investors (just take a look at the charts above!).

Brief Description of Hansen Medical

Hansen Medical, Inc. develops, manufactures, and markets medical robotics designed for accurate positioning, manipulation, and stable control of catheters and catheter-based technologies.

-Fidelity.com

Below is a short video of Hansen Medical.  If you are receiving this via email, please click this link.

Official Recommendation:

As of right now, buying stock in Hansen Medical is too risky.  However, like Zipcar, I will be monitoring Hansen to see if a good investment opportunity arises.  Stay posted!

Buy MAKO and NXTM

Price Drop:

MAKO and NXTM shares plunged today more than 6% and 12%, respectively.  Despite the fact that both companies have been increasing revenue wildly, the market was upset that earnings were not higher.

Long Term vs. Short Term

Short term investors freak out when companies do not meet earnings expectations, long term investors look at the bigger picture.  In the case of MAKO and NXTM, at this early stage of the game, revenue growth is far more important than earnings growth.  As investors, we are most concerned about whether or not MAKO's and NXTM's products are being accepted into the medical community.

If you are new to Caligiuri Investments or need a refresher on MAKO, please click here.

Recommendation of NXTM:

Nxstage Medical has the patent for a home dialysis machine.  Currently, patients must go to the hospital to receive their dialysis treatment, so NXTM provides a much more convenient treatment solution.  In addition, NXTM's dialysis machine has been accepted into the medical community and has experienced tremendous growth in sales.  If NXTM continues to penetrate the dialysis patient market, as I expect it will, investors will rake in the profits.

Green Mountain Coffee Roasters (GMCR) up 21% After the Bell

Congrats to all those who invested!

If you plan to hold GMCR for the long run, I recommend to hold your shares.  If you have not yet invested in GMCR, wait for things to settle down before you invest.  It is common place for a stock to drop the day after a big share price jump.

Here is an article about the 21% share price increase after the bell:

http://tinyurl.com/3z7lp79

Michael R Caligiuri owns shares of GMCR

Zipcar has IPO: 56% Increase

For more information on Zipcar's IPO, please click this link.

Zipcar Overview

Zipcar is an innovative rental car company that has sparked the interest of many investors.  To me, it seems like the Netflix of the rental car industry.  The Zipcar business model is incredibly convenient for customers, which I think will ultimately result in customer retention and loyalty.

How does Zipcar work?

1. Join: 
• You pay an initial fee to have a Zipcar membership.  You will receive a "Zipcard" that will function as a key.
2. Reserve: 
• Sign up for a time-slot when you need a car.  You can also choose to reserve a car for a full day.  Hourly rates are usually $9, while a full day will cost about $70.  It's important to note that gas and insurance are included.
3. Drive:
• Your Zipcar will be ready for you at a parking spot close to your location.
4. Return:
• Return the car back to the original parking spot. 

Final Thoughts

Zipcar has what I love, an innovative and patented business model that "smells right."  Because Zipcar is a relatively young company, it has yet to turn a profit.  This will no doubt be a concern for many investors, however I believe that Zipcar will be profitable in the long-term.  If I had to guess, Zipcar will receive immense interest from outside companies such as Ford and Toyota.  In the end, I believe that this will be at least multi-billion dollar company.

I would advise investors not to invest in this company until more information about its financials are released.

Buy MAKO Surgical

What is MAKO Surgical?

The MAKO Surgical robotic arm provides an innovative orthopedic knee repair procedure.  The surgery has proved to be wildly successful and is already being adopted at a fast pace.  Anyone who suffers from osteoarthritis of the knee should seriously consider undergoing a MAKO Surgical procedure.

For a more detailed analysis please see the video below.  If you are receiving this recommendation via email, please click this link.

Price Jump

Shares of MAKO Surgical jumped over 10% today on news that 11 more MAKOplasty centers (MAKO Surgical robot centers) will open during 2011.  For more information on the price jump, click this link.

Room to Grow


Patents mean profits baby!  MAKO Surgical has the patent on its robotic arm, so it has the ability to charge high premiums due to a lack of competition.  There are more than 15 million people in the United States alone who suffer from osteoarthritis of the knee.  Right now, MAKO performs knee surgeries on less than 1% of of the applicable population in the U.S.  This represents a very large untapped market-share.

MAKO's robotic arms are being adopted at a very fast pace, and I fully expect this aggressive growth to continue.  Time to get on the bandwagon now before its too late!

Michael R Caligiuri owns shares of MAKO Surgical