Meta Platforms, Inc. (META)

It is one of the FANG stocks and is a powerhouse in terms of growth stocks. It is not insanely valued. It is top 25% in momentum and valuation. It has a 22% ROE, 38 times trailing earnings. They are a leader in pretty much everything they do. They beat on the last quarter. It is pretty reasonable here.

All of the big 5 tech stocks have continued to surprise analysts and critics by running up in value. It is an incomprehensible number of users on Facebook. They have proven they can monetize the mobile device. 87% of their revenue now comes from mobile advertising. In technology it has become ‘winner take all’. GOOGL-Q won search, AMZN-Q won online retailing and FB-Q won social networking.

NFLX-Q vs. FB-Q. Two of the fang names have taken us thus far. He would prefer Netflix. It gapped up to $160. FB-Q is bumping its head on rising trend line resistance. He expects a retracement here. He prefers NTFLX-Q.

Facebook (FB-Q) or Netflix (NFLX-Q)? These are both dynamite companies with great opportunities in front of them. If he had to choose one over the other, he would choose this one. He considered using it as a Top Pick today. Looking out over the next year, Facebook has so many different engines that are running, and almost none of them are dependent on another company. Netflix has huge growth in subscribers globally, but is still somewhat dependent on 2^nd or 3^rd party contracts.

He could never understand why people pay an increasing amount of money for a desktop or an iPhone advert when they are not going to ultimately buy the product. The stock has done fabulously well and people have made a lot of money, but he doesn’t understand the business model beyond it being just a great advertising story.

The good thing is that globally, people are using it. For her, it goes back to “these are consumers”, and what happens when the next thing comes around, or if people decide they want to do other things instead of sitting in front of their screens. She has seen over and over again how quickly trends can shift. Too unpredictable for her.

They are destroying the competition, because they are so big. Have 2 billion users and are really everywhere. The data they collect is incredibly valuable. Leveraging video content and advertising is the next step. Trading at 24X earnings, which is great considering that it is growing at 40% a year. (Analysts’ price target is $190.)

(A Top Pick July 6/16. Up 42.24%.) There is a lot of running room and you can still Buy it today. Trading at pretty reasonable valuations.

This is the seasonal period where markets move out of the high beta, technology sector, so this one is going to be faced with that pressure. Also, they are a little overbought. Chart shows a nice solid up-trend since 2015, but then arched way off the uptrend in 2017 and then arched again. Technically, that is good, but is also really overbought. You might get a pullback, and it might be a good opportunity to buy any of the FANG stocks.

He likes this for the simple fact that people are completely addicted to their phones and social media, and you need to have exposure to this. The advertising dollars that are being spent on Facebook is massive, and that is going to continue. Not a cheap stock, but the balance sheet is perfect. They continue to add more products to compete with Snap.

This continues is a great growth story. His model price of $135.82 is under the current stock price by 11.5%. He would like to see a correction. These are wonderful names to pick up on a correction.

This has a great massive advantage over everybody else in their field. Also, there is more advertising done online now than there is on television with most of it going to this company or Alphabet (GOOGL-Q). The risk is that it is no longer seen as a technology company, but more of a broadcasting company. The multiple you pay for a broadcaster is substantially lower than what you pay for a tech company.

(A Top Pick July 13/16. Up 30%.) There is still $200 billion of TV advertising that is expected to move to the Internet over the next 5-10 years.

It is not his preferred tech stock. There is better value in things like GOOGL-Q. FB-Q is in the early innings of monetizing Instagram. It is just a case of what you want to pay for that growth. 30 times earnings for 20% earnings growth is not compelling to him. He prefers GOOGL-Q. He owns AMZN-Q as well.

(A Top Pick July 6/16. Up 28%.) Trading at 24X forward earnings. Has $29 billion of cash. Growing at 30%-40%. Still a Buy.