Facebook Continues Double-Digit Growth - $200 Soon?

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

Facebook Inc. (NASDAQ:FB) recently announced Q3 FY2017 earnings and once again delivered phenomenal growth numbers across the business with beats on both top and bottom lines with revenue of $10.33 billion and EPS of $1.59 translating into beats of $490 million and $0.31, respectively. Total revenue and net income were up 47% and 79%, respectively. Previously, I authored an article and put forth my thesis that Facebook was the preferred FANG stock, collectively comprised of Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Google (GOOG), considering its growth and valuation relative to its FANG cohort. The Q2 FY2017 earnings reinforced this thesis. Facebook had been on an uptrend heading into earnings and broke through the $182 level.

The stock declined after the earnings call due to talk that the company will increase expenses to beef up its security workforce to combat “abuse on our platforms, ” and as a result, the stock sold off a bit to settle at $179 the next day. The stock has had a tremendous run YTD and is up 55.5%. These numbers may seem staggering, and some may contend that buying at these levels would be cashing the stock. Even at these levels and YTD appreciation, factoring in Facebook’s projected growth with technology comparators such as Google, Netflix, and Amazon, collectively known as the FANG stocks, Facebook is far superior with a lower risk profile. Facebook’s projected growth is more significant than Google’s yet has a P/E ratio that’s in-line with Google’s and a fraction of Amazon’s and Netflix’s. I feel that Facebook represents value even after this massive run and I maintain my long thesis. Continue reading "Facebook Continues Double-Digit Growth - $200 Soon?"

Upcoming Facebook Earnings - A Nonevent Long-Term

Noah Kiedrowski - INO.com Contributor - Biotech


Upcoming Earnings

Facebook Inc. (NASDAQ:FB) is due to announce earnings on July 26th after the market closes. Facebook tends to be volatile after earnings are announced and typically pop to the upside as Facebook’s earnings have continued to post robust growth. Back on June 2nd, 2017, I authored an article “Facebook Will Hit $175 By Year End” and with five more months to go before the end of the year, I think Facebook has a good chance of breaking through this number. Facebook has been on an uptrend heading into earnings and currently sits at $160 per share and while the stock is up 39% YTD. These numbers may seem staggering, and some would state that buying at these levels would be cashing the stock. Normally I would agree with this approach. However, I think Facebook is an exception to this situation. Even at these levels and YTD appreciation, factoring in Facebook’s projected growth with tech comparators such as Alphabet Inc. (NASDAQ:GOOG), Netflix Inc. (NASDAQ:NFLX) and Amazon.com (NASDAQ:AMZN), collectively known as the FANG stocks, Facebook is superior with a lower risk profile. Facebook’s projected growth is greater than Google’s and just shy of Amazon’s yet has a P/E ratio that’s lower than Google’s and a fraction of Amazon’s and Netflix’s. Regardless of the upcoming earnings announcement, this will be an immaterial event to the long term narrative for Facebook investors. I feel that Facebook represents value even after this massive run YTD and continue my long thesis. Continue reading "Upcoming Facebook Earnings - A Nonevent Long-Term"

Facebook Will Hit $175 By Year End

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

Facebook Inc. (NASDAQ:FB), Instagram, Messenger and WhatsApp are ubiquitous in this digital age of social, mobile and cloud dominance. Facebook and its properties have dominated the social media landscape posting robust growth in all metrics pertaining to user growth, engagement and monetizing of such metrics, the latter more specifically in the last 3-5 years. Facebook’s earnings growth has been tremendous and has accelerated over the past 4 years. EPS has increased from $0.02 at the end of 2012 to $3.56 at the end of 2016, posting a ~17,500% rise over that period. For a large capitalization company such as Facebook, this growth is very impressive. Judging by the previous 4 quarters, and more specifically its Q1 2017 quarterly results, this growth doesn’t appear to be slowing down anytime soon while steamrolling rivals such as Snapchat (SNAP) in its path of growth (Figure 1). Facebook’s Q1 numbers continue to impress, posting revenue and EPS growth of 49% and 73%, respectively. Facebook doesn’t show any signs of letting up and makes acquisitions to drive the business now with Instagram and WhatsApp and into the future of virtual reality with Oculus. Factoring in its projected growth with tech comparators such as Google (GOOG), Netflix (NFLX) and Amazon (AMZN), I’m predicting that Facebook with hit $175 by the end of the year with a lower P/E ratio than any of the stocks above. If Facebook hits the $175 mark, the stock will still be cheap on a relative basis. My prediction suggests an 18% upside from current levels. Continue reading "Facebook Will Hit $175 By Year End"

The Only Way I Would Play The IPO Market

Matt Thalman - INO.com Contributor - ETFs


With the recently highly hyped Snap Inc. (NYSE:SNAP) initial public offering, I was once again reminded why I don’t attempt to buy into IPO's.

While big name company's first offer their stock to the general public, its call an initial public offering, or an IPO. While there are a number of issue's with buying stocks the first day they start trading, the biggest one is the hype!

The hype surrounding a big name IPO, such as Snap, Facebook, or Twitter to name a few, is that the demand for shares outweighs the supply on the first day of trading. Millions of people want shares and most fear if they don’t get them early, they will miss a big move higher. This hype and fear frenzy often causes shares to skyrocket in the first minutes to hours of trading. Snap for example rose 45% on day one.

But, after the hype fades, so will the stock price. The demand declines to the point that those looking to sell have to be willing to part ways with their precious shares for much less than they sold for on day one. Snap fell 27% on its second day of trading. Continue reading "The Only Way I Would Play The IPO Market"

Realizing Gains Without Owning Shares Via Leveraging Cash

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

I’ve written many articles highlighting the advantages options trading and how this technique, when deployed in opportunistic or conservative scenarios may augment overall portfolio returns while mitigating risk in a meaningful manner. Here I’d like to focus on leveraging cash-on-hand to engage in options trading, more specifically selling covered puts. In laymen’s terms, I’ll cover option variables, an example, strategy and empirical results with commentary.

The Questions

1. Why buy a stock now when you can purchase the stock in the future at a lower price while being paid to do so?

2. Why buy stocks at all when you can make money on the underlying volatility without ever owning the shares?

Overview

Timing the market has proven to be very difficult if not altogether impossible. However creating opportunities to lock-in downward movement in a given stock one is looking to own is possible. If a stock of interest has substantially fallen to at or near a 52-week low, then one has an option to “buy” the stock at an even lower price at a later date while collecting premium income in the process. Alternatively, it's also possible to make money on the option itself without owning any shares of the company via realizing options premium gains as the underlying stock appreciates in value off its lows. This is called a covered put option, covered in the sense that one has cash to back the option contract. Leveraging covered put options in opportunistic scenarios may augment overall portfolio returns while mitigating risk when looking to initiate a future position in an individual stock. In the event of a covered put, this is accomplished by leveraging the cash one currently has by selling a put contract against those funds for a premium. It's also possible to make money on the option itself without owning any shares of the company via realizing options premium gains as the underlying stock appreciates in value. Continue reading "Realizing Gains Without Owning Shares Via Leveraging Cash"