Valuentum Exclusive Analysis for the Discerning Investor

Facebook to Test New Ad Feature
Image Shown: Facebook's share price performance since late 2017. Shares may be poised to breakout of a recent downtrend. Source: TradingView.com. Facebook has faced significant pressure from a number of sources in recent months, but we continue to like the stock, which may be poised for a technical breakout and appears undervalued.

Sep 6, 2018

In the News: Musk, Facebook, and GameStop
We’re not sure that Tesla has things figured out. Social media entities, including one of our favorites Facebook, have fallen on hard times given negative sentiment. GameStop could sell itself for a significantly higher price than what the market is currently willing to exchange shares.

Jul 30, 2018

Facebook: $236 Fair Value Estimate, Now Rated 6 on the Valuentum Buying Index
Image Source: Facebook's second-quarter slide presentation. We were blindsided by Facebook’s outlook, and so was the market. Nobody feels worse about the Facebook idea than we do. Not only was Facebook a top weighting on the Valuentum Buying Index, but it also grew to a rather large position in the simulated Best Ideas Newsletter portfolio. We added Facebook to the simulated Best Ideas Newsletter portfolio at $112.10 in January 2016, and a good portion of its outsize returns have been eroded since its peak at ~$220. We still like shares, but for the company to return to top-rated status, the market would have to get behind it in the form of an advancing stock price.

Jul 26, 2018

Facebook Wounds Self-Inflicted, Margin Guidance Issued to Ease Political Pressure
Social media giant Facebook released disappointing operating-margin guidance for the next couple years during its second quarter earnings call, and shares were promptly crushed. We are putting the company’s fair value estimate under review with expectations of a modest downward revision, but we think the company has the ability to absorb growing expenses and capital spending, both of which are almost completely under its control.

Jul 10, 2018

Twitter Working Backwards?
Image Source: Xiaobin LiuThe social media platform known for its tweets faced selling pressure after reports surfaced that it had removed 70 million fake accounts from its website. Social media is still a relatively young technology, and our top idea in the space remains the cash-rich Facebook.

Apr 25, 2018

Twitter’s Problems: Slow Growth in the US and Low-ROI for Small Business
Image Source: Xiaobin Lui. We like Twitter’s improved free cash flow generation and net cash position on the balance sheet, but it’s too hard for small businesses to build customer trust on the platform, and the lack of engagement from followers at mom-and-pop businesses is almost hard to believe. It seems like Twitter remains primarily a distribution platform for politicians, the media and celebrities, those already having exposure from other avenues. Small, mom-and-pop businesses – the bread and butter behind future advertising revenue at Twitter - can’t make Twitter work for them as returns on their investment remain minimal, at best.

Mar 27, 2018

Value Investors Starting to Salivate Over Facebook’s Fall
Image Source: DonkeyHotey. Facebook is becoming a value investor’s dream: a stock with fantastic free cash flow generation and balance sheet health dealing with transient headline noise. We’re waiting for shares to start to turn upward before we would consider adding to the hypothetical weighting in the simulated Best Ideas Newsletter portfolio. They look cheap!

Mar 19, 2018

Market Overreacts to Facebook News
Image Source: Christopher. The headline news seems concerning, but we’re taking a long-term perspective with Facebook. We doubt the news will meaningfully impact the trajectory of growth of its long-term free cash flow, and we’re not reading too much into events that seem heavily-influenced by the overheated political environment.

Mar 7, 2018

Facebook – Still One of Our Favorites
Image Source: Facebook. Let’s not beat around the bush with this article. Let’s talk about why we like Facebook in layman’s terms. The company is a veritable free-cash-flow generating powerhouse, and its balance sheet is pristine. We value shares at $238 each, and its rating of 7 on the Valuentum Buying Index isn’t bad considering the frothiness of the market.

Feb 7, 2018

Hasbro, Boeing Pop as Market Bounces Back
Image Source: US Missile Defense Agency. June 22, 2014 - The Missile Defense Agency's Flight Test 06b Ground-Based Interceptor launches from Vandenberg Air Force Base, Calif. on June 22, 2014. The markets have finally been getting the volatility that we’ve all been waiting for, and we don’t like the idea that the market is now trading more like a cryptocurrency. Granted, it’s important to stay focused over a long-term time horizon, which irons out the ups and downs, but there’s just something about 1,000+ daily swings on the Dow Jones Industrial Average that really doesn’t sit well with us, regardless of what that implies with respect to the percentage change. Can you imagine -- All of this over just a couple basis point increase in the 10-year and one very, very small ETF losing most of its value? What if something truly material happens? This market is fragile.

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Valuentum Exclusive Analysis for the Discerning Investor