- Facebook attracts the best talent to its company.
- Facebook continues to marry innovative technology with its popular social media platform to stay on top of this ever-changing industry.
- Overall Facebook enjoys a steadily increasing stock market return that will only become more valuable in the future.
Facebook (FB), the undisputed leader in the social media platforms, continues to be the darling of the stock market. In addition to its social media image, Facebook offers cutting edge technological advances that help keep it out in front of its competitors. In spite of issues like its May 2012, IPO of 421 million shares at $38 when its stock closed at only 23 cents above the opening price, Facebook has come back strong.
Fast forward more than two years and it is evident that Facebook stands ready to make 2014 its best year ever. Already to date this year, its stock has risen 16.38%. For the first quarter of 2014, analysts projected earnings of 18 cents per share. Instead, the company returned earnings of 25 cents per share. Even with this fact, 12 analysts at Zacks gave a consensus EPS forecast of just 26 cents for the second quarter.
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- FB 15-Year Financial Data
- The intrinsic value of FB
- Peter Lynch Chart of FB
Not only are Facebook's earnings for the second quarter going to be far higher than the Zacks' analysts projected, it is not enough to simply classify its stocks as a Buy. Instead, they are stocks that smart investors are buying tomorrow.
1. Facebook continues to up the ante by besting its competition when it comes to connecting people by using the latest in technology. In February of this year, Facebook paid $16 billion to acquire WhatsApp. With Facebook projecting that WhatsApp will reach about a billion people within the next 12 to 18 months, the ability to monetize these users positions it to make 2015 and beyond, stellar years. After Mark Zuckerberg unveiled the acquisition of WhatsApp, the company's stocks saw an increase in trading by 4%.
2. Snapchat's founders turned down Facebook's bid for it so they launched Slingshot on June 18th as direct competition to the popular picture sharing app. Giving people what they love about Snapchat, but making it better ( for example, Slingshot allows users to send pictures to multiple users at one time while Snapchat does not) shows that Facebook is not afraid to go head to head with its competition.. Though its stocks opened up at 64.49 on June 18th, at the end of the day, after the announcement about Slingshot, Facebook's stocks closed at 65.60.
3. Savvy moves like when Facebook purchased Instagram in 2012. There is no denying that the purchase was a brilliant move. Acquiring a rival social media app that seemed set on being a significant force to be contended with just makes good business sense. Zuckerberg and his financial advisors could obviously see that Instagram would provide some serious competition for Facebook in the near future if it was allowed to continue to pull in mobile users with its simplified interface.
4. Facebook continues to attract the cream of the crop when it comes to talent. Case in point: David Marcus, the president of Paypal (EBAY) who recently jumped ship to Facebook brings a great deal of experience in the payments arena. Though some analysts think Marcus will be tasked with meshing a payment system with Facebook Messenger, it is just as likely that he will be cutting the bloat that is within Facebook to make it leaner. Regardless of why he was brought on board, Facebook's stock jumped from $62.40 to $62.88 on June 9th, the day it was announced that Marcus was joining Facebook.
Facebook, along with Google (GOOG) and Apple (AAPL), is firmly entrenched as one of the Big Tech Companies. Though the company has had missteps - the failed Snapchat buyout and Facebook credits come to mind - Facebook is not afraid to take chances to protect its top spot in social media.
People love Facebook and the robust trading of its stocks verifies this. The longer that you wait to jump on board the Buy Right Now train, the more you will have to pay for Facebook stock. Its value is only going to rise over the next few years.