Editor's Note: Normally this insight is reserved for paid-up members of Bill Patalon's Private Briefing service, but the long-term profit opportunity with Facebook is so big right now, he wanted to give everyone this inside look. In the following analysis, Bill asked three industry experts for their views on Facebook's performance and potential. The result is better than any stock coverage you'll find available today. Take a look…
"The three men I admire most."
– Don McLean, "American Pie"
In a report back in February 2014, Money Morning Capital Wave Strategist Shah Gilani put a "Strong Buy" on Facebook Inc. (Nasdaq: FB). He said the social networker's shares "will never be this cheap again."
Shah was right.
Facebook stock has zoomed 57% since then.
That means that a stock that was trading at $68.59 when Shah recommended it has vaulted to better than $108 a share.
But I can guess what you're thinking right now…
You want to know where the stock is going to go from here.
And you want us to share the reasoning behind our prediction.
I hear what you're saying…
And today I'm going to give you what you seek.
I'm going to tell you what we're predicting for Facebook.
And you're going to like what I have to say…
Famed investor – and best-selling author – Peter Lynch used to counsel folks to "invest in what you know."
That's great advice.
Especially because of where I work.
Here at Money Map Press, I deal with some of the smartest folks in the worlds of investing, finance, technology, and marketing.
And I went to three of my colleagues about Facebook. When it comes to this company – its performance and its potential – you can view these experts as "The Three Wise Men."
- Shah Gilani, a retired hedge-fund manager who runs our Short-Side Fortunes trading service.
- Michael A. Robinson, our resident tech guru who edits our Radical Technology Profits advisory.
- And Bret Holmes, a visionary e-commerce expert and a close colleague of mine who's the Executive Director here at Money Map Press.
This is a great cross-section of folks to quiz about Facebook's prospects: Shah looks at companies from purely an investment perspective, Michael analyzes them from a strategic technology point of view, and Bret is an actual e-commerce and e-marketing practitioner, meaning he's one of the commercial-side customers whose ad dollars Facebook is seeking.
In other words, if we're embracing the Lynchian strategy of "knowing" what we're investing in… these are three gents who can help us "know" Facebook.
Call it a stock-analysis "triple threat."
Let's look at what each of these experts told me about this company… and its stock.
And we'll start by explaining why this topic is so timely.
Facebook's Powerful Performance
In a report released Nov. 4, Facebook reported third-quarter revenue and profits that trounced Wall Street estimates – and demonstrated that the social-networking leader will continue to see torrid growth.
Net income soared to $896 million from the year-earlier $806 million – and way above the $776.5 million analysts had expected. Earnings per share came in at $0.57 – a nickel ahead of the consensus.
The top-line performance was the real stunner.
Revenue rose more than expected – 41% to $4.5 billion, from $3.2 billion in the same period a year earlier.
There were some concerns about rising costs – which soared a higher than anticipated 68%. But this reflects Facebook's heavy spending on such over-the-horizon projects as artificial intelligence (AI), virtual reality (VR), and Internet access in emerging markets.
But savvy investors know that CEO Mark Zuckerberg has a true "vision" for the company he founded – and has a record of making splashy investments that have big future payoffs.
About the Author
Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning. With his latest project, Private Briefing, Bill takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish... and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.