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The demise of momentum stocks, or Facebook Inc. (Nasdaq: FB) stock at least, appears to be greatly exaggerated.
Shares of Facebook, a notable momentum stock over the last 12 months, spiked $4.22, or 7.3%, to $62.41 Wednesday. The move marked the stock's best one-day gain since Jan. 30.
Over the last three months, shares of the social networking leader are up 9%. Year to date, they have logged gains of 14.2%. FB shares were up more than 25% earlier this year, but slipped along with other high-growth stocks over the last few weeks amid a notable shift from growth to value.
Giving Facebook shares a boost Wednesday were bullish comments from several Wall Street firms:
- JP Morgan analyst Doug Anmuth said the "swift and significant" broad market sell-off has "created some attractive opportunities" for a few high-profile Internet names like Facebook. Facebook stock is down nearly 16% since reaching a high of $72.59 on March 11, but Anmuth said it's still early on in Facebook's aim of monetizing its 1.2 billion global users. Anmuth added that factors such as increasing advertiser demand and improvements in ad quality should drive growth rates that Facebook can sustain for some time to come.
- Susquehanna Financial Group reiterated its "Positive" rating on Facebook, saying it expects the social network leader to easily surpass Q1 estimates when FB releases results after the close on Wednesday, April 23. Current estimates are for FB to post earnings per share of $0.24 a share. The investment house said Facebook's "traction with brands is growing." Susquehanna added the decline in FB stock since it hit an all-time high last month offers a buying opportunity.
- SunTrust, which has a "Buy" on Facebook, said an exec with Facebook ad software provider Nanigans said that Facebook's Q1 ad spending was "stronger than expected when entering the quarter."
More bullish brokerage comments followed Thursday: