Investing in Social Media Today Using Analysts' Growth Estimates

Investing in Social Media
With the current growth in users of social media across the world, investing in social media companies can be a profitable option.

But the temptation to net huge gains - like the 140% return Facebook has seen over the last nine months - is tempered by wariness over mass hype and the real risk of failure.

For instance, two of the most recent social media initial public offerings (IPOs) have both sunk below their initial offering price. Twitter is down 6.17% below its November 2013 initial offering price and has fallen 33.81% so far in 2014. Social media mobile gaming firm King Digital Entertainment (NYSE: KING) is 4.68% under its March 2014 initial offering price.

And despite Facebook's ultimate gain, the stock experienced a volatile ride after its infamously disastrous May 2012 IPO. Through mid-2013, Facebook shares slumped 35% under its initial offering price.

Note:The Fed's 2014 taper means volatility ahead. So we've outlined how to find profits in a volatile market - like triple-digit gains in just days - if you start with this strategy...

Social media companies' "reward versus risk" game makes it difficult when investing in social media.

Here are five of the top social media companies  and their earnings per share growth estimates, to help narrow down and compare some sector favorites...

Investing in Social Media Today By Growth Estimates*

*Data as reported by Yahoo! Finance.

#1: Facebook (Nasdaq: FB)

Growth Estimate

FB

Industry

Sector

S&P 500

Current Qtr.

100.00%

41.20%

N/A

13.30%

Next Qtr.

47.40%

25.80%

13,142.60%

14.40%

This Year

43.20%

71.00%

52.80%

7.90%

Next Year

33.30%

23.20%

24.00%

12.70%

Past 5 Years (per annum)

43.06%

N/A

N/A

N/A

#2: LinkedIn Corp. (NYSE: LNKD)

Growth Est

LNKD

Industry

Sector

S&P 500

Current Qtr.

-22.20%

41.20%

N/A

13.30%

Next Qtr.

-2.60%

25.80%

13,142.60%

14.40%

This Year

-2.50%

71.00%

52.80%

7.90%

Next Year

59.90%

23.20%

24.00%

12.70%

Past 5 Years (per annum)

114.48%

N/A

N/A

N/A

Next 5 Years (per annum)

37.00%

18.14%

17.95%

9.81%

#3: Twitter Inc. (NYSE: TWTR)

Growth Est

TWTR

Industry

Sector

S&P 500

Current Qtr.

N/A

41.20%

N/A

13.30%

Next Qtr.

N/A

25.80%

13,142.60%

14.40%

This Year

111.10%

71.00%

52.80%

7.90%

Next Year

1,000.00%

23.20%

24.00%

12.70%

Past 5 Years (per annum)

0.00%

N/A

N/A

N/A

Next 5 Years (per annum)

-5.57%

18.14%

17.95%

9.81%

#4: Zynga Inc. (Nasdaq: ZNGA)

Growth Est

ZNGA

Industry

Sector

S&P 500

Current Qtr.

-200.00%

41.20%

N/A

13.30%

Next Qtr.

0.00%

25.80%

13,142.60%

14.40%

This Year

125.00%

71.00%

52.80%

7.90%

Next Year

400.00%

23.20%

24.00%

12.70%

Past 5 Years (per annum)

0.00%

N/A

N/A

N/A

Next 5 Years (per annum)

30.00%

18.14%

17.95%

9.81%

#5: Groupon Inc. (Nasdaq: GRPN)

Growth Est

GRPN

Industry

Sector

S&P 500

Current Qtr.

-200.00%

41.20%

N/A

13.30%

Next Qtr.

50.00%

25.80%

13,142.60%

14.40%

This Year

0.00%

71.00%

52.80%

7.90%

Next Year

145.50%

23.20%

24.00%

12.70%

Past 5 Years (per annum)

0.00%

N/A

N/A

N/A

Next 5 Years (per annum)

26.33%

18.14%

17.95%

9.81%

Next: We found a digital payments stock that could surge 50% in just two years. And it's the best play in a trillion-dollar market