For a video summary you can see what I've put together: https://www.youtube.com/watch?v=3bPxjrtjUUk
SUMMARY
Facebook is an advertising giant, more specifically, mobile advertising. Reporting earnings on Tuesday, October 30th - there is a lot of negative investor sentiment which has brought down share price considerably. The Cambridge Scandal, privacy issues, concerns over the EU regulatory environment changes, and general fears about NA user growth have created a great opportunity to start to accumulate shares.
From a peer valuation standpoint, there isn't a tech company with the same level of growth and free cash flow generation with a PE multiple of 22. If FB maintains its 22 business multiple and grows in earnings 15% YoY for the next 3 years (which is a rather conservative view imo) Facebook would easily trade above $200 per share.
Whether Facebook is good for society or not is a separate topic, but from a business standpoint, the fact that people are 'addicted' to Facebook is a great thing for advertisers. I can't go anywhere without seeing people staring down at their phones, scrolling through Facebook or Instragram, or posting their food because we all know you get more nutrients that way.
You can check out a technical chart of Facebook on tradingview.com for a very sleek and free technical charting. If you click indicators and overlays you can find a public library of the most popular free indicators that people have created. Indicators by Chris Moody are my favorite.
On FinViz.com check out the Bubble Charts, in the video above I show an example where I put earnings growth next year on the x-axis and one year price performance on the y-axis. Facebook and Cognizant show up as good opportunities.
Regardless of the earnings report in the near-term, Facebook is a great business to own. Should shares continue to fall, I will continue to buy.
Disclosure: I own FB call options
Submitted October 28, 2018 at 05:33PM by MKEGrowthInvestor https://ift.tt/2zevQk6
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