Facebook did not disappoint after the close April 24. Shares are surging after hours. We continue to value the company at nearly $230 per share.
—
Facebook Delivers in First Quarter, Sets $3 Billion Dollar Legal Expense
—
We’ve been pounding the table on Facebook (FB) since adding an additional 3 percentage points of “exposure” to the Best Ideas Newsletter portfolio in the low $160s in July 2017, and we further added to the company in the newsletter portfolio with shares under $140 each near the December 2018 bottom when we went to “fully invested.” As we have said this entire time, the sell off in Facebook last summer has been a gift to long-term investors!
—
Facebook’s total revenue advanced 26% on a year-over-year basis in the first quarter, while diluted earnings per share, adjusted for the $3 billion legal expense, came in at $1.89, better than the consensus estimate of $1.69. We believe Facebook will once again reach new highs. We’ll have more to share as we digest the company’s conference call. Shares are now trading at $190+ each in after hours April 24. We value the company at nearly $230 per share, and it remains one of the top weightings in the Best Ideas Newsletter portfolio. View Facebook’s stock page >>
—
Microsoft Puts up 14% Revenue Growth in Fiscal Third Quarter
—
We traveled the country talking about Microsoft (MSFT), and how much we liked shares and its dividend growth prospects. The company has become the poster child for what can be considered a strong Dividend Cushion ratio, and with shares indicated up to $128 per share in after hours trading April 24, it’s hard for us not to be extremely happy about keeping this one in front of members for years!
—
We value shares at $114 each, but we’re not removing them. We’d wait for signs of deteriorating dividend health, which doesn’t look like it will happen anytime soon. Had this been a Best Ideas Newsletter portfolio idea, we’d wait for technical and momentum indicators to roll over before removing it. Demand for Microsoft’s cloud offerings drove commercial cloud revenue to $9.6 billion in the quarter — that’s up 40% on a year-over-year basis. We couldn’t be happier with trends at Microsoft. View Microsoft’s stock page >>
—
Visa, PayPal Quarterly Reports, As Expected
—
Though both Visa (V) and PayPal (PYPL) are trading off modestly after hours April 24, we didn’t see anything to be concerned about. Visa’s shares have simply been on fire, and the company has been the top “weighting” in the Best Ideas Newsletter portfolio for as long as we can remember. Visa’s net revenue and earnings per share advanced 8% and 17% on a year-over-year basis during its fiscal second quarter, respectively, so things are looking really good. The pace of growth in payments volume, cross-border volume and processed transactions were also very strong. View Visa’s stock page >>
—
PayPal’s performance was equally good, in our view. During the first period of 2019, revenue grew 12% on a currency-neutral basis, while non-GAAP earnings per share leapt to $0.78, advancing at an impressive 37% clip. The first quarter of 2019 also saw the company open up 9.3 million net new active accounts, above the 8.1 million during the same period last year. Altogether, PayPal has 277 million customer accounts, including over 40 million active Venmo accounts. We continue to like our payments plays Visa and PayPal. View PayPal’s stock page >>
Related: SOCL
—–
Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are free.
Brian Nelson does not own shares in any of the securities mentioned above. Some of the companies written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.