Meta Platforms, Inc. (META)

This is really at the heart of a lot of the social media, and the new wave of interaction. The amount of data they have is off the Richter scale. Not a cheap stock. Has a lot of baked in performance that they are already anticipating. Forward PE of 33, and a trailing of 73, so it has a certain amount of expectations built in. When you get into companies this size, the chances of them getting into higher multiples becomes more challenged. Doesn’t think you are in danger if you own this.

(A Top Pick Aug 18/15. Up 34.8%.) He wrote a Covered Option that did not get assigned, which means that the stock went in and the option expired worthless.

The future is very, very bright. You are paying up on the expectation of future growth. Their numbers are astounding. They have 1.65 billion monthly users and well over 1 billion of active daily users.

This is a dominant business in advertising, and he thinks that dominance is going to continue. They are smart people. The business is a very, very good one and well-managed. He doesn’t like buying high multiple stocks though, because the slightest little hiccup can send them tumbling. Trading at 34X forward earnings which is rich.

This has to have a lot of growth and momentum behind it, but it trades at quite a high multiple relative to others. There is also high expectation that if they miss it can easily come off. (See Top Picks.)

If he had to pick 15 companies, one of them would probably be this. They have created such a defendable business model and subscribership and number of users, and have only really just started to monetize it, using it to generate revenue. What makes it most unique is that they know more about you than anybody else.

This is an example of how he would love to buy all of his stocks. In August 2015, the market had the flash crash and he picked this up at around $80-$85. He is really positive on the name in terms of its future growth. They have Facebook, Instagram, Whatsapp, etc. that really haven’t been monetized yet. Once that starts to push over, he thinks it will drive revenue per user. It is really a changing media Avenue. Not cheap, but they are growing at about 30%-35%.

This is in the epicenter of a big secular theme in social media. They have a tremendous platform and have got an unbelievable subscriber base, and have the ability to monetize all of that through advertising and all other sources of revenue. Thinks they will make a big push into payments and e-commerce, which will also be very successful. Have made a great move into mobile. This is a company that almost every portfolio could own.

The model price is $71.37, a 32% negative, but what you really have to look at is how fast that model price is actually going up. They are doing well over $1 billion a quarter. It’s amazing how much earning power this company does have. If the stock got to $101, he would be a buyer.

(A Top Pick Nov 17/15. Up 3.83%.) 82% of ad revenue is coming from mobiles. Grew free cash flow 68%. About 10% of cash flow is offshore, and 90% of it is available. While they haven’t put a lot of that to use in terms of capital return, they are still in an investment cycle. What they have going for them is growth, revenue, subscribers, and they are investing in technologies. Monetizing their user base of 1.6 billion people, and still growing it.

It does not pay a dividend so he does not hold it. If you want to own a business that is exposed to how society is changing, this is one of those companies. This is the ideal virtual real estate to operate in. FB-O is essentially a toll collector for the entrepreneur. He believes there is a support level at $74 so buy there.

Where would you put a stop loss? This has great growth metrics and good catalysts ahead. He likes stop losses at around 10%-15% below the 200 day moving average, so that he is not whipsawed out of it. He is probably looking at anywhere between $80 and $85.

She tends to look at all of her investments from the standpoint of risk, and she is not really comfortable paying the multiple you need to own this.

(A Top Pick Feb 25/15. Up 32.3%.) The monthly average users is now 1.59 billion, and their daily users are over 1 billion, so the opportunity for reach is spectacular. This is a company that really can’t be analysed on traditional metrics. Hugely expensive and it has to grow into its earnings.

In many respects they have a better mouse trap from an advertising perspective than what Google does. Management is fearless and clearly a visionary. Strong balance sheet and rapid, rapid growth. Trading at 30X earnings, so it is a little bit rich, but they are knocking the ball out of the park. Thinks it could be the largest company in the world in a couple of years.