Despite this social media giant’s recent data privacy scandal, there are lots of reasons why the company is here for the long-term. Buy it now at discounted prices.
Facebook (FB)
From Ian Wyatt’s Million Dollar Portfolio
Everyone hates Mark Zuckerberg these days. The whole Cambridge Analytica scandal is dominating news headlines. Congress asked Zuckerberg to show up on Capitol Hill. And the Federal Trade Commission is investigating Facebook (FB) data practices.
Bad news has investors selling Facebook stock. Shares have dropped from their 52-week high of $195.
Source: StockCharts
Now, everyone agrees that Facebook was made mistakes. The company’s been playing fast and loose with our personal data. It makes me angry. A few vocal people will “QUIT FACEBOOK.” A couple companies like SpaceX will delete their Facebook page. And maybe an advertiser or two will suspend their campaigns.
But at the end of the day, we’ll all continue using Facebook to watch cat videos, see photos of our family and friends, and read some fake news. And this situation creates a timely opportunity to BUY Facebook at a discount.
Facebook isn’t going anywhere. And today, we can buy the stock at an attractive price. Wall Street analysts are currently predicting 36% revenue growth in 2018. Meanwhile, the company’s earnings per share could jump 34% to $7.22. That means Facebook is growing earnings at twice the pace of the AVERAGE company in the S&P 500.
Facebook stock trades at a forward price-to-earnings (P/E) multiple of 21.7. That’s a premium to the forward P/E of 16.5% for the S&P 500. Facebook stock has ALWAYS traded at a premium. That’s because of the company’s superior growth rate.
Eventually, the Cambridge Analytica story will die. The F.T.C. will collect a few billion in fines. And Facebook will resume its upward trajectory.
I like the stock below $165.
Ian Wyatt, Ian Wyatt’s Million Dollar Portfolio, www.wyattresearch.com, April 6, 2018