Facebook Inc (NASDAQ:FB) might have started out as an online tool for college students to connect, but now the social media website has grown to include the presence of teenagers and seniors, as well as consumer companies. These trends have landed Facebook in the news on more than one occasion, leaving investors up in the air about what to do with his or her shares of Facebook. In our Flashback Friday, let’s take a look back at one trustworthy analyst and his successful recommendations to shed some light on Facebook’s stock.
There are currently 1.23 billion Facebook users who are active on the social media website every month! Are you one of them? Even if you are an avid Facebook user – liking your friends’ posts and updating your status every hour – you still might be unsure of how to handle Facebook as it relates to the stock market. Before you make any decisions about your financial portfolio, you should consult someone you can trust due to their proven track record, such as Wells Fargo analyst Peter Stabler.
Peter’s recommendations have carefully taken into account the changing trends on Facebook, earning him high returns and proving his position as the number 20 ranked analyst out of 2384 analysts. Peter’s consistently positive results concerning Facebook have led to his 8.5% average return over S&P-500, as well as his 92% success rate of recommended stocks.
Southpoint Qualified Fund and Southpoint Qualified Offshore Fund returned 2.5% net for the first quarter, compared to the S&P 500's 6.2% return and the Russell 2000's 12.7% gain. During the first quarter, Southpoint's funds averaged 133% long and 70% short. Q1 2021 hedge fund letters, conferences and more The fund's long positions added 13% gross Read More
Peter recommended BUY FB after observing the strong engagement by global brands on the website. Peter believed it was important to see the presence of consumer packaged goods brands on Facebook and he saw evidence that, “even low-interest categories [had] made firm commitments to social platforms and that FB [remained the] best positioned to capitalize on growing social-spend.” Brands such as, Coca-Cola, Pepsi, Budweiser and Dove stood out as brands “that [had] made clear and deep commitments to cultivating social communities across multiple social platforms.” Following this recommendation Peter earned +8.2% over S&P-500.
Even when Facebook experienced a supposed decline in “young-teen” daily active users, Peter was not phased, recommending BUY FB again. Peter noted that this slight decline was “not a concern of ours, as total teen segment was stable, and we expect Instagram was likely a leading beneficiary.” Peter added that, “we believe this segment to be of low importance to advertisers and that penetration likely continues to exceed that of any other demographic.”
At this same time, Peter urged people to look at other important factors, including the fact that “the rapid growth in participating advertisers (now over one million) will drive competitive bidding and that products such as Custom Audiences and Partner Segments offer compelling targeting stories that will drive positive ROI.” Because of Peter’s thoughtful reasoning, he earned +19.7% over S&P-500.
Most recently, Peter recommended BUY FB now that all products, from airlines to baby wipes, are engaged on Facebook. “We believe brands both large and small are recognizing the unique opportunities presented by FB’s scale, targeting capabilities, engagement signal return path, analytics, and array of ad formats.” Due to this trend, “year/year ad revenue growth of 76% accelerated from 66% growth seen in Q3 on 16% year/year monthly active user growth.” Peter is currently earning +3.6% over S&P-500.
Deciding whether to friend someone on Facebook, or not, is a decision that you can make all on your own. But, there is no need to make difficult financial decisions without the help of someone you can trust. The next time you are considering Facebook shares, you might want to take a look at Peter’s past recommendation success and turn to Peter for his advice. To continue following Peter’s financial recommendations, as well as advice from other analysts, download TipRanks today and start making informed financial decisions with advice you can trust.