Re FB - I am well aware that FB is in the data mining business, but they can only do datamining when the users are in their websites. I say websites, because FB is becoming more of a holding company for social media networks than just FB. It is pretty clear that usage in NA of he core FB website has topped out, but it looks like they can still squeeze more $ out of each user and then there is a the rest of the world where the ARPU is only a fraction of what it is in thr US (<1/5 of the US value in Europe), then there is instagram (currently catering to teens and beating Snapchat)m what’s up (huge in Europe and some Asian countries and not monetized at all). I expect FB to get into video content, payments, virtual reality (Oculus is a leader thethr) and many other fields to strengthen their ecosystem.
FEIW, I purchased all my shares during the Cambridge scandal selloff in the low $160 range and added a few more at $165 in this selloff. My math is simple - FB will make $7.5 this year and I bought it for $140 ex cash, so I am paying 19x earnings for a business that can grow it’s revenues 25% for quite the some time and is the undisputed leader in their business. This is actually cheaper than many industrials trading which can grow mid single digits over an economic cycle. My thesis may turn out incorrect, but that IMO is one hell of a margin if safety IMO.
As far as congressional hearing are concerned, of course it’s a negative, but it also looked like FB is trying to correct the issues that have been the cause. While not positive for near term earnings, it is clearly a sign that FB is taking a very long term view here.
I believe the YouTube commentator is a shill that does nothing else but hunting for eyeballs. His analysis is shallow and not really worth my time. I state this not just based on his FB opinion piece, but also on his clips about several economic events. |
