Valuentum Exclusive Analysis for the Discerning Investor

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May 22, 2020

Facebook Augments Its Impressive Growth Trajectory
Image Shown: Shares of Facebook Inc have outperformed the S&P 500 index year-to-date, as of this writing on May 21, by a wide margin. Facebook is a top-weighted holding in the Best Ideas Newsletter portfolio and shares have surged upwards of late, sparked in part by its strong first-quarter 2020 performance, relatively speaking, given the ongoing coronavirus (‘COVID-19’) pandemic. As of this writing on May 21, shares of FB are up ~14% year-to-date while the S&P 500 is down ~8% during the same period (this is before taking dividend considerations into account; however, that doesn’t change this picture by much). We continue to like Facebook as a top-weighted holding in the Best Ideas Newsletter portfolio and please note that the top end of our fair value estimate range sits at $289 per share. Given the company’s strong fundamental and especially technical performance of late, there’s room for shares of FB to march significantly higher from current levels.

May 11, 2020

Facebook Is Roaring Higher!
Image Shown: Shares of Facebook (blue line) have roared higher since reaching their March 2020 lows, far outpacing the rebound in the S&P 500 (orange line). We continue to like shares of FB as a top-weighted holding in our Best Ideas Newsletter portfolio. Top-weighted Best Ideas Newsletter portfolio holding Facebook posted first quarter 2020 earnings on April 29 that saw its GAAP revenues jump 18% year-over-year to $17.3 billion while its GAAP diluted EPS grew by 101% year-over-year, hitting $1.71. Please note that Facebook’s bottom-line comparison was made easier due to the firm recording a $3.0 billion legal settlement with the US Federal Trade Commission (‘FTC’) during the first quarter of 2019. While digital advertising spending levels are expected to get crushed in 2020 due to the ongoing coronavirus (‘COVID-19’) pandemic, Facebook communicated to investors that its long-term growth trajectory remained very promising during the firm’s latest quarterly conference call. In our view, digital advertising spending levels will quickly bounce back once economies around the world start to reopen in earnest, though we caution that efforts to reopen the economy and resume “normal” daily activities need to keep in mind the risk another wave of infections imposes.

Apr 30, 2020

Alphabet Surges Higher
Image Shown: Shares of Alphabet Inc surged higher on April 29 after reporting a stellar earnings report, and we continue to like Alphabet Class C shares as a top-weighted holding in our Best Ideas Newsletter portfolio. After the market close on April 28, Alphabet reported first-quarter earnings for 2020 that beat top-line consensus estimates and missed bottom-line consensus estimates, with sales supported by the strength of its digital advertising business and its growing Google Cloud business. Alphabet’s advertising revenue (comprised of revenue from its Google Search, YouTube, and Google Network Members' properties operations) was up 10% year-over-year to $33.8 billion while Google Cloud reported 52% revenue growth year-over-year, reaching $2.8 billion last quarter. All-in-all, Alphabet’s GAAP revenues climbed higher by 13% year-over-year in the first quarter, hitting $41.2 billion. Shares of Alphabet moved significantly higher on April 29 as the firm’s outlook was better than expected, aided by management communicating that Alphabet was prepared to utilize its fortress-like balance sheet to repurchase stock at a meaningful discount to their intrinsic value.

Apr 28, 2020

Good News for Facebook Ahead of Earnings Report
Image Shown: Facebook Inc’s top-line has experienced meaningful growth in recent years. Image Source: Facebook Inc – Fourth Quarter and Full-Year 2019 Earnings IR Presentation. One of our favorite Best Ideas Newsletter portfolio holdings is Facebook, and we appreciate its pristine balance sheet (plenty of cash on hand and no debt on the books as of the end of 2019), promising growth trajectory (short-term headwinds aside, digital advertising is a secular growth market and likely to bounce back strongly once the pandemic subsides), and we would like to highlight that shares of FB trade at a meaningful discount to our fair value estimate (which sits at $234 per share) as of this writing. Recently, several things have happened that supports our thesis as to why Facebook is a stellar company which will cover in this note. The ongoing coronavirus (‘COVID-19’) pandemic will depress Facebook’s near-term performance, but the firm’s medium- and long-term outlook remains very promising.

Apr 13, 2020

Pinterest Sees Interest in its Social Media Site Grow During COVID-19 Pandemic
Image Source: Pinterest Inc – Fourth Quarter of 2019 Earnings IR Presentation. Social media firm Pinterest published an operational and financial update after the market close April 7 that caught a lot of investor’s eyes. Pinterest reported that its user base, measured by monthly active users (‘MAUs’), had continued to grow sequentially in the first quarter of 2020 on both a domestic and international basis. While the ongoing coronavirus (‘COVID-19’) pandemic has likely negatively impacted its digital advertising business, Pinterest is communicating to investors that over the longer term, its social media offering is growing in popularity which supports growth down the road.

Jan 9, 2020

ALERT: Facebook at All-Time Closing Highs
"I'm completely baffled by Facebook's pricing action, and I still think this one will again return to new highs." -- Nelson, December 20, 2018, with shares trading at ~$130 each. Shares of Facebook registered an all-time closing high of $218.30 per share January 9, 2020.

Oct 10, 2019

Our Reports on Stocks in the Internet Content & Services Group
Image Source: Christopher. We've optimized our technology coverage.

Jun 3, 2019

US Government Launches Anti-Trust War Against Alphabet, Apple, and Facebook
Image shown: Technology shares took a beating during the trading session June 3.The DOJ and FTC are coming after Alphabet. Apple, and Facebook, and we can’t help but feel the moves are in some ways politically motivated. Even if regulators decide to break up these companies, it doesn’t mean that they will “confiscate” their businesses. Worst case scenario, perhaps pieces of their businesses would be auctioned off at arguably above-market prices, which could be a net positive.

Apr 24, 2019

Facebook Surges! Microsoft, Visa, PayPal Quarterly Reports Solid
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. Microsoft, Visa and PayPal quarterly reports were solid, too.

Apr 3, 2019

Facebook’s Huge New Opportunity in Instagram Checkout, Reiterating Fair Value Estimate ~$230
Image Source: Facebook's InstagramWe continue to like Facebook, and we’re huge fans of Instagram Checkout. Many may not know it yet, but Instagram Checkout may mark the beginning of retailers’ websites becoming obsolete. The sell-off last summer in Facebook was a big gift for those that stuck with our thesis.