Facebook operates as a social networking company. I've been bearish on Facebook since before the IPO. I haven't found a reasonable edge investors can achieve from buying this one.
Sure, Facebook may increase in price; after all, I predict the odds, not the future. Subsequently, after factoring in downside risk I can't suggest buying shares. I'm not implying the Web site isn't great or it's not the best in class from a user point of view. I simply mean we can find lower-hanging fruit that offers a better opportunity.52-Week Range: $17.55 to $45 Price To Book: 5.3 Expect the upcoming first-quarter earnings report after the market closes on Wednesday. The analysts' consensus earnings assessment is 13 cents a share. Analysts are estimating as low as 10 cents per share, up to the most optimistic estimate of 16 cents per share. Unlike my pessimistic view, over half of the analysts covering Facebook rate it as a buy or strong buy, 21 of the 37 analysts covering the company give a buy recommendation, 14 analysts rate it a hold and two recommend selling.
Additionally, Facebook now has nine analysts rating the company as a strong buy, up from eight a month ago. However, the number of analysts rating Facebook a strong buy during the last three months has shifted higher and lower. Overall, if you own Facebook, you may not have my bullish opinion, but at least the major analysts are in favor of the investment idea. Earnings have been a mixed bag for the stock in the short time since its IPO. Expect a lot of volatility. If you're an investor who wants to sleep at night, look to sell call options before the earnings release as a means to hedge your position. It's also an ideal time to gain the outsized premium. FB Revenue Quarterly data by YCharts
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV