Meta Platforms, Inc. (META)

The numbers are great and the margins are there. This is a super story. He loves the long-term approach they are taking. They are taking their time. Have hit all of their metrics so far. There is a lot of news coming on it now where that can be a real disruption as to where people get their news. Too richly valued for him.

This now has all the ducks in a row and is really ready to deliver. It is a bit of a reach on a PE basis, but when you look at who is going to do well in the future, this one stands out. This is a sector that he thinks is going to grow so well that you have to have some of it in your portfolio. 73% of revenues come from mobile sources.

Advertising is a huge market and what we are seeing is a massive shift. 20 years ago print was the big ad market. This company is one of the beneficiaries on that shift. He is still on the fence on this. He would like to see more out of them before investing. A really expensive stock, so he would wait for a pullback before getting involved.

Not a deep value stock, but he has to admire companies that have been able to deliver great growth, evolve their business model in a very short period of time and be able to figure out what advertisers and consumers are looking for and monetize that.

Dropped about 10% off its highs. This is in the face of some of their competitors reporting results that have largely been panned by the market. This company’s results were quite good. The opportunity on this company is immense. There is a lot of runway here. A lot of the 10% fall back is market related. A little bit of nervousness because of their peer group. Longer-term he feels this is a stock that is going to do quite well.

Really admires the company. Has done an outstanding job. Has owned this off and on and wishes he had never sold. They have done a fantastic job of growing the business. Thinks virtual reality is going to be a big thing, not just for gaming but also for shopping, education and training. Has a very large ecosystem of people and are able to monetize it. Trading at a rich valuation, but not at an outrageous one.

A nice breakout. From a seasonable standpoint it is not something he would be interested in but from a technical point of view it looks strong. If it breaks below $83 it would be time to step out.

Has been looking at this for a long time and what put him over the top was the sheer size of having 1.39 billion in monthly average users. Some of their purchases such as Instagram and Messenger are doing incredibly well. Also, the advertising trends are very exciting. Mobile for example, which grew 100% year-over-year, is leading the way from an advertising standpoint with Facebook. However, when you look at the statistics, 25% of the US adult media time is done on Mobile, yet only 11% of advertising dollars are aimed at Mobile. There is a lot of room to catch up, so that will be in favour for Facebook. He sees another Google coming along.

Had owned this shortly after the IPO. A great story and the execution has been very, very strong. However, it is way too expensive at these prices.

(Top Pick Oct 18/14, Up 37.18%) When you have 25% of your users’ time and only 4% of ad revenues you have an asymmetric risk and it is in your favour. There is still a fair amount of upside. Their advertising model works very well. The return on their customers’ investment is very high.

No dividend. They did this recent acquisition, paid for it out of stock. That is a powerful signal that shares are grossly overvalued.

He was skeptical about this when it went public. However, has been very impressed with their success in monetizing, particularly mobile platforms. There is a lot of competition in the social/media space and there are always new things coming up. Next earnings come out on Oct 28, which may surprise on the upside.

His model price is $41, a 46% downside. His issue with this company is that they bought WhatsUp for $19 billion. That will double the assets of the company, which will probably have a big impact on his model price calculation. He is waiting for the completion of this.

Whenever he buys a stock, he always chooses an initial Sell target. That grounds him from the get-go. This company did very much what he expected when they IPO’d a few years ago. In the majority of the cases, a year later, the stock is down in value. This is a leader in its field. He doesn’t follow this company, but does like leaders.

Looking very interesting. 1.35 billion active users and 1.4 million advertisers. They are becoming more than what we saw them as, a social media, and are really getting a lot of traction on the advertising side. Looks like they could be another Google (GOOGL-Q) so there is good opportunity. The downside is that they are trading at $75 and have $1.50 in earnings, so the multiple is extreme. With these situations, you generally see companies growing into their earnings. Watching it carefully.