Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Why Investors Should Be Friends With Facebook Inc


The weight of the evidence continues to point toward the bulls, so investors should work toward becoming heavily invested in FB, says Mike Cintolo of Cabot Market Letter.

Overall, the market is acting according to plan. The major indexes have traded relatively tightly in recent days, after a huge melt-up in late June and early July.

There has been some churning of late, with the market having a few days that began well, but closed weakly, as volume picked up-a slight sign of distribution.

But that action can be inconclusive. What's more important is that both of my trend-following indicators are positive, and the unwillingness of the market to give back much of its gains to this point is encouraging.

As for individual stocks, the newest addition to my firm's model portfolio is Facebook (NASDAQ:FB), which needs no introduction.

The stock has been on a tear, and to us, it looks like it's entered its first real uptrend, after more than a year of flushing out its post-IPO investors.

After a few quarters of sloppy results, worries about a mobile strategy, and fears of too much investment (as with Amazon (NASDAQ:AMZN)), Facebook recently delivered a stunning report last week-revenues grew an amazing 53% (this for a company with more than $6 billion in revenue!) while advertising revenue grew 61%.

And mobile ad revenue, which was basically zero a year ago, now makes up 41% of all ad sales!

As you'd expect, with more than 1 billion users per month, the earnings power here is tremendous, and the stock, after wearing out investors for more than a year, has exploded higher on record volume. This is the type of liquid, fast-growing, huge-potential stock that growth investors thrive on.

We think it's OK if you want to start with a half-sized position in FB, and then look to add on the way up; the short-term is bound to be volatile after the recent advance. But the power on the rally has been great, and we think institutional investors will be buying shares for a while.

Editor's Note: This article was written by Mike Cintolo of Cabot Market Letter for MoneyShow.

Below, find some more great investing and trading content from MoneyShow:

It's a Milk War in China

Amp Up Your Portfolio with AMPS

Some Favorite Funds from Kiplinger's

Twitter: @TopProsTopPicks
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos