| Stock (Symbol) | Stock Price | |
Facebook (FB) |
$81 |
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| Data is as of | Expected to Report | Sector |
April 29, 2015 |
Jul 21 – Jul 27 |
Technology |
| Sharek’s Take | ||
 Facebook’s wasting an opportunity to post substantial profit growth because management wants to spend money to keep the site on the cutting edge of technology. Profit growth slowed to 24% last qtr even though sales surged 42%. Recently acquired Instragram and WhatsApp are extremely popular, continue to evolve, and are two powerful allies in FB’s fight to stay on top. With a P/E of 41 the stock is right where it should be, and I don’t anticipate it moving higher until Q4 as 2015’s profits are expected to rise just 12% even though sales could jump 36%. This is a great long-term stock but investors who are trying to make money now might want to look elsewhere at this time. |
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| One-Year Chart | ||
 Profit growth slipped from 74% 2QtrsAgo to 24% last qtr. Estimates show teen growth ahead but my guess is FB can deliver 20%-25% growth. Notice the stock went from climbing to basing in the $70s, then broke out and was unable to move higher. |
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| Earnings Table | ||
 As mentioned earlier, profit growth was 24% on a 42% rise in sales. FB beat the street by just 2 cents, which is the lowest its beaten by in two years. Annual Profit Estimates grew slightly, but are around what they were 4QtrsAgo. Top-tier growth stocks have annual estimates which are increasing — this stock isn’t top-tier right now. Qtrly profit shows teens growth the rest of the year. I think FB could do 20% to 25% growth each qtr. |
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| Fair Value | ||
 Facebook is worth 40 times earnings, and with a P/E of 41 its right where it should be. I caution investors not to sell because there’s good growth expected next year — but management could cut guidance as that gets closer as it did late in 2014. |
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| Ten-Year Chart | ||
 Nice rise for the stock in 2013. Now its a slower-growth period. Stinks that the stock’s not ascending like it did, what a wasted opportunity. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
11 of 22 |
Facebook is treading water this year as it spends too much money. Hopefully profit growth will accelerate in 2015. Still, this is a must own franchise for diversified growth stock accounts as it has fantastic long-term appreciation potential. |
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Aggressive Growth Portfolio
N/A |
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