As I wrote in late September, "This is a company worth $7.3 billion, but with just $121 million in sales and $5 million in profits in its most recent quarter. Of course, the company is growing very quickly and investors are counting on strong growth to continue for an extended period."

What do just-released quarterly results tell us? Well, as expected, LinkedIn is still growing at a fast pace -- for now. Third-quarter sales rose roughly 15% sequentially to $140 million, ahead of the $127 million consensus forecast. Frankly, that consensus forecast looked awfully conservative in light of recent quarter-over-quarter gains, and the stock rightly fell about $5 in after-hours trading. (A subsequent announcement that the company would issue new shares in a planned $100 million offering pushed shares down even further.) The stock is now roughly flat since the time I recommended shorting it (while the S&P 500 has risen almost 10% in that time frame).

Where to from here? I still suspect that there's a lot more downside than upside in this stock, beginning the minute investors start to see that double-digit sequential sales gains can't be maintained. By a variety of metrics, LinkedIn grew roughly 50% to 65% from this time last year. (Membership grew 63%, while page views rose 51%.) That works out to a low-teens rate on a quarter-over-quarter basis. Better monetization helped sales grow at almost twice that pace, but you can't assume continued higher monetization and instead need to think of this business model in terms of those membership metrics.

All of this is not meant to imply that there is anything wrong with the LinkedIn business model. It's a solid and sustainable growth platform. It's just that the $8 billion market value anticipates more growth than the company can reasonably deliver. In my analysis in late September, I noted that 25% annual sales growth (beginning in 2013) and 40% annual earnings per share (EPS) growth still only yielded $1.86 billion in sales and $1.34 in EPS by 2016. Let's assume that's too conservative and sales reach $2.2 billion and EPS hits $2. At around $80, or 40 times what 2016 EPS might look like, this stock remains too richly valued and should remain in focus for short-sellers.

Risks to Consider: Clearwire and Eastman Kodak may still manage to secure a financial lifeline and their stocks would quickly rally on such news. So these are high-risk shorts. LinkedIn represents less risk, as the stock can move up a bit from current levels, but still looks poised for a steady downdraft as long-term growth assumptions start to get dialed down.

Action to Take --> Peppering in these short plays amidst an otherwise long-oriented portfolio can help protect you from a renewed bout of market weakness. Any one of these stocks looks like a suitable short from where I sit.

A slowing economy would prove especially perilous for Eastman Kodak and Clearwire as these companies remain unprofitable and will surely need further injections of capital. LinkedIn, on the other hand, is simply too richly-valued based on its current growth trajectory.

-- David Sterman