Facebook Inc (NASDAQ:FB) founder, Mark Zuckerberg, lost $3.1-$4 billion at the end of March when Facebook stock dropped 11% in response to the stock market decline, after reaching its peak on March 4th. While this is a lot of money, and a big dip for the stock, not all investors are thinking negatively about Facebook. Soon, Facebook will be in the news for its latest privacy tweaks, including reminders about privacy settings and adjustments that make it easier access to these settings. And, SunTrust analyst Robert Peck recently recommended BUY Facebook after reviewing advertising data and observing positive trends.
Robert reiterated his BUY FB rating with a $70 price target after learning that, “Q1 ad trends were strong at quarter’s end than when they started out.” When speaking with an executive from ad buying startup Nanigans, Robert learned, “The main take away was that while Q1 revenue growth had started sluggish, it significantly reversed itself in 2nd half of the quarter to finish stronger than expected when entering the quarter, with revenues for Nanigans FLAT to Q4.” And in addition, “Nanigans is seeing continued strong demand heading into 2Q from its advertisers, setting up what the company thinks will be a robust year. The rollout of video ads is encouraging more Brand spending (as opposed to just DR).” And major drivers of growth include, 1) Instagram progressing, as advertisers are very interested to reach Millennial demographic; 2) mobile network off FB; and 3) Facebook showing professionalism integrating with Nielsen and working a deal with Omnicom Group Inc. (NYSE:OMC).”
Robert’s successful recommendations of technology companies, including Facebook, have helped earn Robert a spot as number 132 out of 2979 analysts, with a +7.1% average return over S&P 500 (INDEXSP:.INX) and a 57% success rate of recommendations. In this week’s Throwback Thursday, we’ll take a look at how Robert earned his 75% success rate recommending Facebook. To see all of Robert’s recommendations, download TipRanks.
Walter Schloss isn’t a name many investors will have heard today. Schloss was one of the great value investors who trained under Benjamin Graham and specialized in finding cheap stocks. His track record was outstanding. In Warren Buffett’s 1984 essay, the Super Investors of Graham-and-Doddsville, he noted that between 1956 and 1984, Schloss’s firm returned Read More
Due to the fall of all major technology stocks two weeks ago, Robert’s most recent Facebook recommendation saw a negative return. In February, Robert reiterated his BUY FB rating and $70 price target right after the company purchased WhatsApp. Robert argued, “While the $19b acquisition price of WhatsApp by Facebook could seem astounding at first, we think this was a shrewd move by the company, both strategically and valuation wise.” Robert agreed that this was the right move to continue on the company’s mission of connecting the world. However, this recommendation left him with -13.6% over S&P-500.
However, before this recommendation, Robert recommended BUY Facebook Inc (NASDAQ:FB) at the end of January and received a positive return. Robert reiterated a BUY rating and raised his price target from $65 to $70 after the release of strong Q4 results. Just like now, Robert was focused on the power of advertising, noting, “Facebook had a tremendous quarter, accelerating ad revenues growth to 76%, up from 66% last quarter. Further, the company expanded operating margin to 56% at the same time, driving incremental margins >70%. Ad mix shift and effectiveness (ROI) drove a 92% price per ad increase, partially offset by an 8% decline in impressions. We think this is attributed to the effectiveness advertisers are seeing in the News Feed ad units and hence their willingness to spend more on the platform.” Robert also called Facebook’s data and reach as an advertising force, “unparalleled”. This recommendation earned Robert +11.2% over S&P-500.
Robert also said BUY Facebook Inc (NASDAQ:FB) at the beginning of January, due to the success of mobile advertisements. Robert raised his price target from $55 to $65 and also raised his fourth-quarter earnings estimates based on, “the integration of mobile advertisements, the better quality of advertisements on the site and the monetization of Instagram.” Robert earned +8.4% over S&P-500.
Back in 2013, Robert’s BUY Facebook Inc (NASDAQ:FB) recommendation saw a positive return. Even though there were some hesitations about the Q3 results, Robert said BUY FB on October 31, explaining that “the positive outweigh the concerns.” Robert noted, “We are concerned what the lack of impression growth could do to hamper ad revenue growth, but also think that new products like App install engagement ads, Instagram, graph search, and video ads could offset this pressure.” Robert’s thoughts were no trick, and his recommendation earned him a nice treat with +6.5% over S&P-500.
In fact, Robert’s most successful recommendation was his BUY Facebook Inc (NASDAQ:FB) rating on July 16, 2013. Robert initiated coverage on the stock with a $32 price target, observing, “Facebook reaches over 1.1b unique visitors every month and over 660m unique visitors every day! The scale and reach of the company is unprecedented and provides unique optionality that few others can match. We identify ~$7b of potential incremental revenue, exemplary of Facebook’s unique optionality.” Robert’s positive perspective proved to work in his favor and earned him +68.4% over S&P-500!
With fingers crossed, tech stocks will bounce back sooner than later, and Facebook will, hopefully, rebound from its 11% drop. So, to continue reviewing Robert’s recommendations about Facebook Inc (NASDAQ:FB), as well as other technology stocks, be sure to download TipRanks, and start making informed financial decisions with advice you can trust.