The Social Giant Still Stands Tall

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Nov 27, 2013
The social media giant Facebook (FB, Financial) continues to dominate the Internet as the most used site for social interaction. Odds are that either one personally uses the site or knows several individuals that do. The question that arises is whether or not the growing activity on Facebook is a reflection of the company’s worth or a stagnation of current users? For the answer for such a question, one must look beyond the narrow scope of the past few months and view the company’s progressive increase.

If one were to look at the past week in FB stock, it would appear that the market is dwindling. Nasdaq reports that FB stock has fallen 3.63%. Such a deduction in the worth may appear to be a sign for a holder to sell. However, if one were to look at FB over the past year one will see that the market has almost doubled since this time last year. MSN Money shows that the low for FB over the past 52 weeks was last year at $22.67. Recent events will show that the market has stayed in the 40 to 50-point range with the 52-week high totaling a nice $54.22.

Investors which currently own FB stock would be advised not to sell at this point. Where the stock is at a high, which is usually ideal for selling, one will see that the market has declined by 14.32%. One should not take this as an indicator of the value of his or her stock. On the contrary, the stock has shown to do nothing but flourish over the year, yielding a 68.37% increase. The slight dip in the market should be seen as nothing more than common fluctuation. Investors are advised to hold on to existing shares as the market appears to be increasing still. A watchful eye on the recent decline would do one good. Should the share value continue to decline, the investor would be wise to sell while the market is high.

It is not foreseeable that there is any reason to cause the investor to need to sell. The company remains in the black with $9.63 billion and debt of $2.36 billion, although the growth of the overall company has slowed dramatically by -95.21%. Again, one should look at the overall usage of FB, the stock’s overall increase over the last 52 weeks, as well as consider that should the price per share double as it has this year the financial gain would be substantial upon selling.

Those seeking to invest in FB would be smart to do so at this time. The market has shown a steady increase since the company’s beginning in February 2004. Other investors are seizing shares at an average rate of 26%.

Should the slight dip be an indicator to wait and buy at a lower cost? Based upon the market trends of the past month it would appear to be a sound choice. Compared to Google (GOOG, Financial) which has shown an increase of 12.72% and Yahoo (YHOO, Financial) which has shown only a 0.23% decline, FB is at a prime spot in which to buy with a temporary decline of 1.55%.

The potential investor is strongly cautioned not to delay too long in their investment. Though the market has fallen in the past month slightly, the overall increase in FB stock as well as the increase in investors would lead one to conclude that an increase spike is inevitable in the near future. Based upon the company finances one will see that the sales and revenue continue to grow at a rate of 37.13%. Should a potential investor decide to wait on investing in FB, they are very likely to pay a higher price per share. One should approach FB shares as a long-term investment and not as a quick sell. For the best yield one should expect to hold their shares for a minimum of 52 weeks. Should the market continue on its current path, such an investment will increase the shares by a minimum of 50%.

Overall, FB is an investment worth having in one’s portfolio. The market shows that this stock is increasing as well as remaining competitive overall. Long-term investments have proven to pay a return of 66% or higher depending on the length held, and the buy and sell activity has remained constantly at a level one should expect with a Nasdaq stock. Those that have already acquired FB stock are encouraged to hold their shares. Individuals that are seeking a quality investment are encouraged to buy now while the market has shown a slight decline. Based upon the company’s last five years, one can expect to be paying close to $75 this time next year, whereas now the cost is in the low $40s.