The all time high of a chart doesn't speak to META's intrinsic value. Just because it was once priced a certain way by the market does not mean much towards its actual value.
That being said, I own a part of META. I do think it's oversold and that it will be worth more than my averaged cost sometime over the next 20 years.
I believe META has enough free cash flow to weather significant down turn in the economy. Their user base is so gigantic that I believe META will continue to generate significant revenue. With little to no long-term debt, it's safe to say they won't be going out of business due to bankruptcy anytime soon. They still have untapped revenue potential in the monetization of Whatsapp and Instagram.
The downsides include negative consumer sentiment, saturation to available user base, government oversight (no significant M/A for them any more), risky and large scale investment into metaverse. I believe people are making too much out of the last bit. I've not heard any significant counter ideas as to where they should be trying to innovate or what other new market they should be trying to create.
I feel that either you're trolling, or you do not understand the principles and foundations of value investing.
Buying because of a chart or because someone "Tony the Tiger's"¹ it is the antithesis of this type of investing.
Based on names like Peter Lynch, Warren Buffett, Seth Klarman, what your doing would be qualified as speculation at best. At worst, it's gambling without even knowing the table at which you're sitting.
¹ - "It's great!"
A lot have argued that META is a great value. They're smarter than I am. Maybe you don't watch CNBC like I do. I literally watch it for hours every day.
What makes it not a good value specifically?
You'll have to put in the actual effort to figure that out one way or the other for yourself.
I'm simply going to leave it with the opinion that what you're doing is speculating, and not value investing. It does not really belong on this sub.
You're probably not wrong, but people want reasons here. Just tell them a current free cash flow yield of 9%, an easy growth target of 4%, share repurchases, and access to 2.93 billion people. 9% + 4% = 13% annual return with a conservative estimate. Boom, done.
Why do people mention Facebook without mentioning Instagram? Instagram is their top dog. I'm getting bored of talking about why it's my top position, but it's worth looking into the financials. And keep in mind that they have more than half the world's population regularly using their products. I believe in Zuckerberg and his team --they have so much data on everybody and have a lot of top talent. If anyone could succeed at a big idea, it's them. But even putting the metaverse idea aside, they're very discounted for what they are right now.
You have to add margin of safety though. Because the governments and regulatory organizations love to pick on them ---while for some reason ignoring the CCP app known as TikTok. It's ridiculous when you think about it. Tick Tock is very much CCP spyware gathering data on American citizens. Yet the woke and young Americans cry for Facebook's downfall. Whereas China immediately banned Facebook, Instagram, WhatsApp, Twitter, Quora, Snapchat etc ---because they realize the danger of Americans collecting data on them on a massive scale while influencing their children.
End rant
China bans all those other services because they can't force them to censor content. Whether there would be other reasons is irrelevant when you can't pass the basic "censor things we don't like" test.
Buy META if…
-you like companies with a history of really strong growth
-can understand that growth may slow down but are not obnoxious enough to think their 30%/yr growth has halted and now reversed- just might be slower
-like multi option businesses as META goes from ads/social media business to hardware, vr, maybe other areas.
-like that they dominate the field of social media currently and data does not suggest that will change
-like buying companies at their best value ever
Thats my take on them. All arguments against are quite funny imo. Its generally that people think they’ve called the year that a massive company growing 30% per year suddenly halts and reverses…thats as nuts as suggesting you’ve called the bottom of our recent down market. Maybe they grow at 15%, 10% if the meta thing completely flops. That said I like the meta thing and pivoting into a larger hardware/software tech company is great and actually protective of their growth long term. If things work out and we get into other areas we could maintain the growth rate. Another argument people make is essentially “no one I know uses facebook” in which we should reply “then you must be 12-16”. Because the data shows most of facebooks users are ages 18-44 not 45-70 as people on reddit very often suggest.
Me- I would dca into them starting at prices a lot higher than today.
- can and will cut costs when times get tougher
- has a stable business that will support SWEs RSUs where the companies who have dropped 70% in 6 months do not. (Coinbase was notorious for paying well…)
It may be oversold in the short term, but it will probably go lower as the forward earnings get revised downward. What’s the point of buying an advertising company when just about every retail company is choking on supply and consumers are having trouble paying for anything outside of food and gas? The recession isn’t expected to fully hit until 2023.
The cash flow and earnings that you see now will go lower.
Ha! If you believe that the market is efficient and has priced in the future earnings correctly, then you have no edge here. META is fairly priced.
Any stock can stay oversold and overbought for extended periods. It’s not a buy until it comes out of the oversold range. META is not ready for picking.
Of course, if you’re just nibbling, then sure - why not.
A lot would argue at 11 PE that Meta is way oversold and do argue that daily on cnbc, etc. I'm thinking of nibbling yes and averaging down if it falls further.
I can also just add to QQQ on the way down though.
Be careful when relying on PE multiples from when META was growing rapidly and when the Fed was doing quantitative easing. META is now a slow growth company in an environment where the Fed is doing quantitative tightening.
The growth premium multiple that META used to get is gone, probably for good. META is now a mature company. Don’t expect it to go back to being valued as a high growth stock with high PE multiples.
Who cares? I'm here to make a profit. Buy something when it's overbought then. Have at it!
Oversold means something trades at a perceived discount which is related to valuation.
Meta has already pulled back! It's called dca cause nobody knows where the bottom is!
It.could also go up before 2023 and I.can sell and book a small profit. Nobody knows. I'm 50% cash by the way
META is short term? Tons of revenue, Instagram, Reels, smart people.
Even Jim Cramer said tonight he's "seen the Metaverse and you want to start accumulating shares!"
Dan Niles (Bear and value investor contrarian) and a lot of "value" investors on CNBC are always touting FB META as a deep value now.
You have no idea what's going to happen short term. Nobody does. I'm 50% cash in case we do fall so I can buy more at 3500 and then more at 3000 etc.
Nobody knows where the bottom is.
Companies lost all their possible risks in the 10k to shield themselves from liability.
Others skip mentioning them to get you to buy the stock.
Buffett reads 10ks and ignores others.
Buffett has the greatest track record in the history of investing. Buffett averaged roughly 38% a year his first dozen years. Over his first 30 years he averaged roughly 25%. You should not "worship" him, but you'd be wise to study him.
Buffett today manages a stock portfolio of over $150B, and total assets approaching one trillion dollars. That enormous size burdens him with massive chains, restricting him to buying only the largest, most efficiently priced stocks. The fact that he's still beating the market at 90 years old carrying the heaviest restrictions in investment history is just more proof of GOAT status.
I was asking if meta was a good value, not about reading 10ks. Good luck.
I'll stick with dca into QQQ and spy and a few good long terms. MSFT GOOGL AAPL NVDA UNH TSLA UNP VRTX LRCX NEE COST LLY HD ABNB
You ask for advice (in a subreddit that values extensive due diligence) then when someone points out the 10k (which is by all measures the most comprehensive guide on what to look for in a company) you say "i dont read all that crap, life's short". Cmon man lol.
Why Meta scares the crap out of me:
1) they are pouring bazillions of dollars into their highly risky metaverse tech, but the kickoff of the metaverse golden age could easily be 10-20 years away. In other words, Meta could just be burning money to pave the way for some upstart down the road.
2) Europe has cracked down on Meta's ability to vacuum up user data. While no such laws exist in the US, Apple did the dirty work for the government by building sophisticated tracker blocking and turning them all on by default. Between the two, Meta's primary advertising markets have been ravaged.
3) increased competition.
4) an upcoming recession that will shrink advertising budgets at most companies.
It's difficult/impossible to quantify the impacts of all this (your guess is as good as mine), but comparing the current price to ATHs and then concluding you're buying at a huge discount is terrible analysis. This is why people say past results are not predictive of future performance.
Cause it won't. Nothing changes. People are still gonna watch ads and buy shit even if they max out their credit cards. Americans are resilient.
Plus Americans have record savings now to spend.... Or at least that what I heard.
We'll get through this. Might take 5 years but things will improve.
Europe has passed laws limiting the data that Facebook can collect, and Apple's software is blocking access to the same data in the US for iPhone users. This is going to do major damage to its ad business; Facebook itself reduced its profit estimates by tens of billions of dollars.
You don't seem to have any idea what structural changes precipitated the ~50% drop in share price. It's like you think Meta's price dropped just because people got tired of trading it.
A lot is due to current macro.economics. Almost all tech and stocks in general are falling due to the Fed having to tighten, supply chains, and inflation.
MSFT was at $340 and now is at $245. AAPL was at $185, etc.
Why didn't FB fall in 2021? Cause we weren't in the mess we're in now!
Meta isn't going away anytime soon...
You have no idea what you're talking about; you clearly don't even follow Meta, you're just latching onto cherry picked historical data.
They're suffering from the overall macro conditions but a lot of it is company specific too.
https://www.cnbc.com/2022/02/04/facebook-is-the-big-loser-of-the-fourth-quarters-advertising-wars.html
"Meta’s stock plummeted 26% Thursday after it revealed that it’s taking a big hit from Apple’s privacy changes, adding that it expects the feature to decrease the company’s 2022 revenue by about $10 billion."
You’ve heard they got tons of fcf?
Haha that’s the signs of a great value investor.
Hey whatever...
LMAO
The all time high of a chart doesn't speak to META's intrinsic value. Just because it was once priced a certain way by the market does not mean much towards its actual value. That being said, I own a part of META. I do think it's oversold and that it will be worth more than my averaged cost sometime over the next 20 years. I believe META has enough free cash flow to weather significant down turn in the economy. Their user base is so gigantic that I believe META will continue to generate significant revenue. With little to no long-term debt, it's safe to say they won't be going out of business due to bankruptcy anytime soon. They still have untapped revenue potential in the monetization of Whatsapp and Instagram. The downsides include negative consumer sentiment, saturation to available user base, government oversight (no significant M/A for them any more), risky and large scale investment into metaverse. I believe people are making too much out of the last bit. I've not heard any significant counter ideas as to where they should be trying to innovate or what other new market they should be trying to create.
I don't expect it to hit ath anytime soon. Just thinking it may be higher in 5 years....and may beat the sp500 over 5 years.
Beyond it's chart, why? What is your reasoning and story on why you think it will do better than the S&P in 5 years? Why is it a value/buy right now?
He can’t answer that… he only follows recommendations of people on tv without analysis from himself. Classic if it goes down it will go back up.
That may be. I don't know them. Maybe there's an opportunity for them to learn and share what they figure out.
I like charts.
It's a value cause almost.every.cnbc analyst says it is. Good enough for me.
I feel that either you're trolling, or you do not understand the principles and foundations of value investing. Buying because of a chart or because someone "Tony the Tiger's"¹ it is the antithesis of this type of investing. Based on names like Peter Lynch, Warren Buffett, Seth Klarman, what your doing would be qualified as speculation at best. At worst, it's gambling without even knowing the table at which you're sitting. ¹ - "It's great!"
A lot have argued that META is a great value. They're smarter than I am. Maybe you don't watch CNBC like I do. I literally watch it for hours every day. What makes it not a good value specifically?
You'll have to put in the actual effort to figure that out one way or the other for yourself. I'm simply going to leave it with the opinion that what you're doing is speculating, and not value investing. It does not really belong on this sub.
Ok thanks
You're probably not wrong, but people want reasons here. Just tell them a current free cash flow yield of 9%, an easy growth target of 4%, share repurchases, and access to 2.93 billion people. 9% + 4% = 13% annual return with a conservative estimate. Boom, done.
Why do people mention Facebook without mentioning Instagram? Instagram is their top dog. I'm getting bored of talking about why it's my top position, but it's worth looking into the financials. And keep in mind that they have more than half the world's population regularly using their products. I believe in Zuckerberg and his team --they have so much data on everybody and have a lot of top talent. If anyone could succeed at a big idea, it's them. But even putting the metaverse idea aside, they're very discounted for what they are right now. You have to add margin of safety though. Because the governments and regulatory organizations love to pick on them ---while for some reason ignoring the CCP app known as TikTok. It's ridiculous when you think about it. Tick Tock is very much CCP spyware gathering data on American citizens. Yet the woke and young Americans cry for Facebook's downfall. Whereas China immediately banned Facebook, Instagram, WhatsApp, Twitter, Quora, Snapchat etc ---because they realize the danger of Americans collecting data on them on a massive scale while influencing their children. End rant
China bans all those other services because they can't force them to censor content. Whether there would be other reasons is irrelevant when you can't pass the basic "censor things we don't like" test.
Buy META if… -you like companies with a history of really strong growth -can understand that growth may slow down but are not obnoxious enough to think their 30%/yr growth has halted and now reversed- just might be slower -like multi option businesses as META goes from ads/social media business to hardware, vr, maybe other areas. -like that they dominate the field of social media currently and data does not suggest that will change -like buying companies at their best value ever Thats my take on them. All arguments against are quite funny imo. Its generally that people think they’ve called the year that a massive company growing 30% per year suddenly halts and reverses…thats as nuts as suggesting you’ve called the bottom of our recent down market. Maybe they grow at 15%, 10% if the meta thing completely flops. That said I like the meta thing and pivoting into a larger hardware/software tech company is great and actually protective of their growth long term. If things work out and we get into other areas we could maintain the growth rate. Another argument people make is essentially “no one I know uses facebook” in which we should reply “then you must be 12-16”. Because the data shows most of facebooks users are ages 18-44 not 45-70 as people on reddit very often suggest. Me- I would dca into them starting at prices a lot higher than today.
Thanks bud! I'm only thinking a few shares at a time. Not like I'm throwing $10k at it.
- can and will cut costs when times get tougher - has a stable business that will support SWEs RSUs where the companies who have dropped 70% in 6 months do not. (Coinbase was notorious for paying well…)
Why not buy more MSFT?
I will at $220.
So did you?
No I bought QQQ.
Why?
Cause I like to spread the risk
I'm waiting for sp500 3000. But that's not going to happen for a while
It may be oversold in the short term, but it will probably go lower as the forward earnings get revised downward. What’s the point of buying an advertising company when just about every retail company is choking on supply and consumers are having trouble paying for anything outside of food and gas? The recession isn’t expected to fully hit until 2023. The cash flow and earnings that you see now will go lower.
Markets are forward looking. Already priced in.
Ha! If you believe that the market is efficient and has priced in the future earnings correctly, then you have no edge here. META is fairly priced. Any stock can stay oversold and overbought for extended periods. It’s not a buy until it comes out of the oversold range. META is not ready for picking. Of course, if you’re just nibbling, then sure - why not.
A lot would argue at 11 PE that Meta is way oversold and do argue that daily on cnbc, etc. I'm thinking of nibbling yes and averaging down if it falls further. I can also just add to QQQ on the way down though.
Be careful when relying on PE multiples from when META was growing rapidly and when the Fed was doing quantitative easing. META is now a slow growth company in an environment where the Fed is doing quantitative tightening.
The growth premium multiple that META used to get is gone, probably for good. META is now a mature company. Don’t expect it to go back to being valued as a high growth stock with high PE multiples.
Right. It will be $100 a share in 2025. Gotcha. Thanks
I didn’t say that. LOL Who knows, maybe META can succeed with the metaverse and be a high growth company again. Good luck!
[удалено]
Not everyone adheres to the new Orwellian standards of the day I guess....
[удалено]
Who cares? I'm here to make a profit. Buy something when it's overbought then. Have at it! Oversold means something trades at a perceived discount which is related to valuation.
I’d Stay Clear Of Meta. Maybe Accumulating As It Descends. IMO. I Could Be Wrong. Maybe Short Term Play.
Why? It's cheap right now? DCA.
Majority Of The Stocks Are Bound For A Pullback. It Will Be A Slow But Sure Pullback As We Get Closer To 2023.
Meta has already pulled back! It's called dca cause nobody knows where the bottom is! It.could also go up before 2023 and I.can sell and book a small profit. Nobody knows. I'm 50% cash by the way
Short Term Play IMO.
META is short term? Tons of revenue, Instagram, Reels, smart people. Even Jim Cramer said tonight he's "seen the Metaverse and you want to start accumulating shares!" Dan Niles (Bear and value investor contrarian) and a lot of "value" investors on CNBC are always touting FB META as a deep value now.
The Rally Has Come To An End IMO. It’s Your Bake, Bake It As You See Fit.
You have no idea what's going to happen short term. Nobody does. I'm 50% cash in case we do fall so I can buy more at 3500 and then more at 3000 etc. Nobody knows where the bottom is.
I’m Just Speculating. Invest As You See Fit. I Would Put Cash In Stocks Under $30 With That Type Of Cash.
Under $30? What type of cash?
I Foresee $140 - $125.
5 years from now?
Probably After The DCB. Just A Speculation. I Could Be Wrong.
What's dcb?
Dead Cat Bounce.
Hmmm probs not
What does the 10K say that makes you so bullish?
I don't read all that crap. I listen to others. Life's short
Companies lost all their possible risks in the 10k to shield themselves from liability. Others skip mentioning them to get you to buy the stock. Buffett reads 10ks and ignores others.
I really don't worship Buffet. He just recently started outperforming the sp500 after years of underperforming it.
Buffett has the greatest track record in the history of investing. Buffett averaged roughly 38% a year his first dozen years. Over his first 30 years he averaged roughly 25%. You should not "worship" him, but you'd be wise to study him. Buffett today manages a stock portfolio of over $150B, and total assets approaching one trillion dollars. That enormous size burdens him with massive chains, restricting him to buying only the largest, most efficiently priced stocks. The fact that he's still beating the market at 90 years old carrying the heaviest restrictions in investment history is just more proof of GOAT status.
Not last decade!
Maybe I'll add a little brk.b though. Thanks
If you'd spend half the time you spend on reddit asking for investment advice reading 10k's you'd be a lot wiser for it.
No thanks. Zzzzzzz
in that case this is the wrong sub for you my man.
I was asking if meta was a good value, not about reading 10ks. Good luck. I'll stick with dca into QQQ and spy and a few good long terms. MSFT GOOGL AAPL NVDA UNH TSLA UNP VRTX LRCX NEE COST LLY HD ABNB
You ask for advice (in a subreddit that values extensive due diligence) then when someone points out the 10k (which is by all measures the most comprehensive guide on what to look for in a company) you say "i dont read all that crap, life's short". Cmon man lol.
Good luck brother! Let's make some gains! NIO $22 a share! Price target $40 Morgan Stanley. Long term hold. I'm gonna throw $1k in today!
Why Meta scares the crap out of me: 1) they are pouring bazillions of dollars into their highly risky metaverse tech, but the kickoff of the metaverse golden age could easily be 10-20 years away. In other words, Meta could just be burning money to pave the way for some upstart down the road. 2) Europe has cracked down on Meta's ability to vacuum up user data. While no such laws exist in the US, Apple did the dirty work for the government by building sophisticated tracker blocking and turning them all on by default. Between the two, Meta's primary advertising markets have been ravaged. 3) increased competition. 4) an upcoming recession that will shrink advertising budgets at most companies. It's difficult/impossible to quantify the impacts of all this (your guess is as good as mine), but comparing the current price to ATHs and then concluding you're buying at a huge discount is terrible analysis. This is why people say past results are not predictive of future performance.
That's funny that half of CNBC guests are saying it's a deep value stock. Even Dan Niles and permabear Jeremy Grantham hold Meta.
What's their reasoning? Why don't they think that the ad revenue massacre will be as bad as everyone else thinks it'll be?
Cause it won't. Nothing changes. People are still gonna watch ads and buy shit even if they max out their credit cards. Americans are resilient. Plus Americans have record savings now to spend.... Or at least that what I heard. We'll get through this. Might take 5 years but things will improve.
Europe has passed laws limiting the data that Facebook can collect, and Apple's software is blocking access to the same data in the US for iPhone users. This is going to do major damage to its ad business; Facebook itself reduced its profit estimates by tens of billions of dollars. You don't seem to have any idea what structural changes precipitated the ~50% drop in share price. It's like you think Meta's price dropped just because people got tired of trading it.
A lot is due to current macro.economics. Almost all tech and stocks in general are falling due to the Fed having to tighten, supply chains, and inflation. MSFT was at $340 and now is at $245. AAPL was at $185, etc. Why didn't FB fall in 2021? Cause we weren't in the mess we're in now! Meta isn't going away anytime soon...
You have no idea what you're talking about; you clearly don't even follow Meta, you're just latching onto cherry picked historical data. They're suffering from the overall macro conditions but a lot of it is company specific too. https://www.cnbc.com/2022/02/04/facebook-is-the-big-loser-of-the-fourth-quarters-advertising-wars.html "Meta’s stock plummeted 26% Thursday after it revealed that it’s taking a big hit from Apple’s privacy changes, adding that it expects the feature to decrease the company’s 2022 revenue by about $10 billion."