Google Inc (GOOG), Netflix, Inc. (NFLX) & LinkedIn Corp (LNKD): Time to Start Selling These Tech Names?

Then there is the issue of foreign growth. While Netflix, Inc. (NASDAQ:NFLX) has deftly moved into new markets, spending on that expansion has been a drag on earnings. In fact, that spending was part of the reason why earnings fell from over $4.00 a share in 2011 to about $0.30 a share in 2012. Add in the fact that content prices are generally heading higher, and there could be trouble brewing for this high flyer. Consider taking at least some of the house’s money here.

Business friends

LinkedIn Corp (NYSE:LNKD) is yet another good tech company. It basically owns the business social network space. That’s a key differentiation from social network competitors since it has allowed LinkedIn Corp (NYSE:LNKD) to charge customers for services. The peer to peer networks simply haven’t figured out how to monetize their customers in the same way.

Despite the recent pullback, the shares are still up materially over the past six months. And, using the trailing 12 months of earnings through the first quarter, the recent price in the $180 range equates to a price to earnings ratio of well over 450. That’s too high. Even if the bottom line doubles from here, the P/E is still over 200.

LinkedIn Corp (NYSE:LNKD) has a great business, but its shares are priced too dearly. Any hint of weakness is likely to be quickly punished. Consider pulling back if you have profits.

Safety first

Even if the market has more room to run, it makes sense to lock in some profits on your winners. Google Inc (NASDAQ:GOOG), Netflix, Inc. (NASDAQ:NFLX), and LinkedIn Corp (NYSE:LNKD) are all great companies, but they are either trading too dearly or have notable headwinds to deal with. Consider pulling back on your risk by trimming or selling your positions.

Reuben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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