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Strategies & Market Trends : Value Investing

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Jurgis Bekepuris

To: Elroy who wrote (59686)	1/29/2021 4:49:39 PM
From: Paul Senior	1 Recommendation Read Replies (1) of 78753

Elroy, I look at FB this way: Last quarter: "Revenues increased 33% year over year to $28.1 billion and edged past the estimated $26.4 billion. The revenue growth represents the company’s fastest growth rate in more than two years." The profit margin on those sales is about 33%, maybe a little less. So from each of those dollars in revenue, FB is able to bring in about 33 cents to the bottom line. It doesn't get any juicier than that. Ok some negatives besides big ones of political interference/righteousness fights/punitive possible taxes: 1.FB says line of sight to 2021 ad revenue is not clear. 2. FB is a good/great profit generator now. How much should an investor pay for that, i.e. is there a p/e where it's too expensive and are we there? Which you discussed. In my view, the p/e (and thus price to pay for the stock now) is not too expensive at all. Of course, jmo, and I've been wrong many, many times. Maybe here as well.

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