Tag Archives: Facebook

by | January 30, 2014 · 1:38 pm

Facebook up 12,4%

So far this year, Facebook is down -2,0%. Yesterday, Mark Zuckerberg launched the new report FQ4earnings, and after that, the stock jumped 12,4% in after hours trading. That is pretty good for a stock that everybody predict will die like a virus and lose about 80% of its users by 2017.

Researchers at University College London stated that Facebook is «dead and buried». The teenagers has escaped and Facebook is not cool anymore. The fact is that Facebook has grown its EPS and revenue last eight quarters, and they have 847 million active users.

Facebooks fourth-quarter revenue topped analysts estimates. Revenue rose 63% to $2,59B. Mobile promotions generated $1,25B and accounted for 53% of advertising revenue. Previous quarter was $49%. Mobile is the key for Facebook, so I think it`s going to be a great battle between Facebook and their competitor Twitter in the future.

Net income rose to $523million, or 20 cents a share. That`s up 17 cents a share from a year ago. As an educated marketer, I will follow both Facebook and Twitter for their battle on the digital-ad market. Twitter will release their first earnings as a public company feb 5. We look forward to that.

It is expected that Facebooks market share will rise to 9% by 2015, while Twitter will grab a 2% share. Facebooks average price of ads is up 92% from a year ago. It will be more quality ads instead of quantity ads. Next week they will celebrate 10 year. Happy birthday.

If the teens have gone from Facebook, where are they? They are on Instagram, and the number of people on that platform is truly remarkable, but right now they don`t have any data for this teen engagement. Facebook is the owner of Instagram.

Last year Facebook offered $3 billion to acquire Snapchat Inc. This platform is also very popular to teenagers. It`s understandable that the younger teens aren`t using Facebook`s website anymore. They have so much other alternatives.

Facebook is not only Facebook. It`s Instagram too. Instagram is growing and has doubled its user base. This mobile photo-sharing service company have 180M MAUs, and that`s pretty good compared to last years 90M MAUs.

Mark Zuckerberg says Facebook is planning to launch several new apps in 2014. They will develop more standalone mobile apps with great new experiences that separates from what you think of as Facebook today.

Facebook Messenger had a 70% growth in the last 90 days. North America still accounted for 47% of the revenue in Q4. Last month, they sold $3,85 billion of shares in a secondary offering. That is Facebook`s first share sale since going public. The stock more than doubled last year.

Holidays starts tomorrow to mark a change in the Chinese zodiac calendar from the snake to the year of the horse. On a day like this, many Chinese people buy gold as a gift and the demand is rising. As you know, the Chinese economy is growing fast, and so are the demand for jewelry, bars and coins. It rose 30% last year, and that is the highest of any nation, World Gold Council data show. Net imports of bullion from Hong Kong more than doubled last year.

Reports today: Advance GDP q/q at 8:30am, Unemployment claims at 8:30 and Pending home sales at 10:00am.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication

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by | January 21, 2014 · 2:38 pm

Salesgrowth

What is the revenue of all these social media companies? Snapchat say they have 400 million snaps per day, and Pinterest say they have 1,5 million pins per day. Wow. It sounds like they both are big companies. Are they? Snapchat has been valued at $2 billion with about 30 million active users.

What about Facebook? They also have a lot of users, but how many of them is active users? And what about Twitter? Nasdaq is now trading at 4197,58. Last time Nasdaq was trading at about 4000 was in 1999. You all know that the dot-com-bubble bursted in year 2000.

Today I want to show you an overwiev of the media companies. Who is the biggest, and who have the biggest growth? You know it is more easy for small companies to have a huge growth than the big one, so don`t look at the growth isolated.

Below you will see a list of 15 different companies in the media online business. The first list is a list with the companies with the best growth. No matter what the market cap is. Take a look at the list below, which is a list that compares the sales growth in 2013.

Company Salesgrowth Market Cap
Qihoo 360 Technology 106,20% 9,88
Youku Tudou 76,80% 5,12
Yelp! 67,50% 4,63
LinkedIn 60,10% 25,58
Facebook 51,70% 137,17
Baidu 47,40% 60,94
Tencent holdings 4,80% 119
Sohu.com 32,2 2,76
Yandex 28,60% 13,89
Sina 28,1 5,52
Google 13,90% 371,74
Groupon 8,00% 7,62
Pandora Media 0,00% 5,26
Yahoo! -0,60% 40,58
Zynga -27,00% 3,18

The blue shows the companies with salesgrowth in plus, and the yellow, shows the company which is in status quo. Red speak for them selves. Take a look at Zynga. Salesgrowth last year was down -27%.

Next list is about the market cap where Google is the biggest. Take a look:

Company Salesgrowth Market Cap
Google 13,90% 371,74
Facebook 51,70% 137,17
Tencent holdings 40,80% 119
Baidu 47,40% 60,94
Yahoo! -0,60% 40,58
LinkedIn 60,10% 25,58
Yandex 28,60% 13,89
Qihoo 360 Technology 106,20% 9,88
Groupon 8,00% 7,62
Sina 28,10% 5,52
Pandora Media 0,00% 5,26
Youku Tudou 76,80% 5,12
Yelp 67,5 4,63
Zynga -27,00% 3,18
Sohu.com 32,20% 2,76

No major reports today.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | December 13, 2013 · 2:37 pm

M&A (merger and acquisition)

As I wrote about earlier, you must look for small cap stocks in the Russell 2000 now. It is risky, but high risk means high gain, and you have to spend money you can afford to lose. So why small cap stocks?

You see, America is for sale and that is for the highest bidder. What I am talking about is really good companies out there. The companies that no one is talking about. The cheap one. The innovative one.

There is a lot of money out there waiting for good investments. Many of the great companies are searching for the right small cap stocks. Why? They simply want to thrive by purchasing growth.

Take a look at Google. For example, they expanded and bought Youtube.com. Everyone is afraid of Google. They are a great example of a model for what a media company needs to be in order to be competitive in the future.

Cisco was smart enough to buy companies with great talents instead of developing them themselves. Cisco have done this over 140 times since 1993. They are infusing new ideas and new ways of thinking by doing it like this. It makes them strong and competitive. Google seems to do exactly the same thing and that makes them stay ahead of a rapidly changing competitive landscape on internet.

The really biggest day in e-commerce in history is Cyber Monday. $10 billion was spent from about 70 million online shoppers. That`s an increase of 18%. 30% of the purchases came from a mobile device. 80% of those came from an Iphone or iPad. unbelievable!

And here is the catch: Social sites generated only around 1% of the e-commerce sales on that day. An increase of only 2%. So, E-commerce is the real big thing. It`s business. 17% of the sales came from Email. That`s pretty nice.

Facebook, Twitter, Instagram and Pinterest are popular sites and people still think that social media is a marketing must. The numbers are falling and the money is not in here. Social media is better for branding, networking and community building, but direct sales is better other ways than social media. Will we see any M&A in this sector in 2014? Are those big ones looking for small caps?

This is a tremendous investment opportunity and you as an aggressive investor need to play on it. But how? I expect next year to be a takeover boom! You have probably seen it before and know that nothing jolts a stock higher than an unsolicited takeover offer. The stock prices skyrocket on rumors like that.

Who say no to a single-day return of 50% or more? I have many new and exciting companies on the radar, but I can`t tell you what stocks it is. It is a lot of research behind the work of finding the best stocks, so this is what I get paid for.

But I can tell what sectors you should look for. It is technology and healthcare. I expect a lot of action in those sectors next year. I really look forward to 2014. It`s gonna be a funny year. So, I am still bullish!

News today: PPI m/m at 8.30am.

mergers-acquisitions-2-300x286

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | November 14, 2013 · 1:57 pm

Price to earnings 2

Margin of safety is very important. It seems to be like that the human psychology is apt to go too far sometimes and it can all end up to throw rational valuation out of the window.

You know that price-to-earnings for Facebook is 12, and 13 for Twitter, and if you are paying more than 15 times the earnings for a company, you need to seriously examine the underlying assumptions you have for the companies profit in the future, and its intrinsic value.

I have seen many stocks trading with much more than 12 and 13x earnings, and if you have bought some of them at that price you would have crushed other investments because the underlying prifits did live up to Wall Streets expectations.

But who is investing in a risky business if they don`t know the business they are in? Do you feel confortable if you have all your money in a risky stock like that if you don`t know the demand, competitors, future drivers and the commodity nature of their product? The company can be wiped out, so does your money, but probably not.

The ideal situation is when you get a great business out of your investments and generates huge amount of money with little capital investments. Sometimes you get a huge profit at a steep discount to intrinsic value. How about Wells Fargo, trading at 5x earnings during the real estate crash 23 year ago?

You have to predict the future and try to imagine how the future will be for the company. How is it today, tomorrow, next year and how does it look in 10 years? Is this business going to grow? Will it be a huge demand for their products? Are they competetive? What about their earnings and profit in the future? Is there any threats?

I know a great company. They are selling cd`s and vinyl records. Everybody knows about the company and the price is low. Are you willing to buy shares in this company? Of course not. Selling vinyl and cd`s is not the future and you know that. The future is streaming and broadband. That is where you are going to spend your money.

It is wise to require a much larger margin of safety before you buy some shares in enterprises. The right definition of ‘Price-Earnings Ratio – P/E Ratio is; A valuation ratio of a company’s current share price compared to its per-share earnings. It is calculated like this:

Let`s say company A is currently trading at $50 a share and earnings (EPS) over the last 12 months were $1,95 per share. Then the P/E ratio for the stock should be 25,6. ($50/$1,95). That`s it. Remember that the average market P/E ratio is 20 – 25 times earnings.

EPS (earnings per share) is taken from the last four quarters (trailing P/E). Sometimes the numbers is taken from the estimates for the next four quarters (projected or forward P/E). Other use the last two actual quarters and the estimates of the next two quarters. Often known as “price multiple” or “earnings multiple”.

It will be wrong to compare price-to-earnings in a technology company (high P/E) to a utility company (usually low P/E) as they have a different growth prospects. P/E tells us how much investors are willing to pay per dollar of earnings. P/E for Facebook is 12, which means that the investors is willing to pay $12 for $1 of current earnings.

Avoid basing a decision on this measure alone, because this numbers is usually not enough. the earnings is based on an accounting measure of earnings that is susceptible to forms of manipulation. It makes the quality of the P/E only as good as the quality of the underlying earnings number. Keep in mind that companies that are losing money do not have a P/E ratio.

News today: Trade Balance & Unemployment Claims at 8:30am, Fed Chairperson Yellen Testifies at 10:00am, 30 Year Auction at 1:01pm.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | November 7, 2013 · 1:28 pm

Twitter IPO price at $26

Stock market is expensive. Twitter IPO is expensive (without profit). More expensive than Facebook and LinkedIn. But anyway, I think the stock will soar today. The question is: for how long? For all I know we will be forced to buy shares in the aftermarket if we want to grab some.

Twitter say this stock is more risky themselves and that is bad news for the investors considering what happend to Facebooks IPO in the aftermarket. The demand for this stock is huge, and we will probably see the stock skyrocket in the beginning.

Twitter is unprofitable at the moment and they are headed in the wrong direction. In the first six months of 2013, they increased the loss by 41% to $69,3 million. Like I have said before: Shareprice follow earnings, so what are you thinking about the Twitters share price? Based on the info we have so far, it doesn`t bode well for the Twitter shares.

Another ting is the market timing. Expensive shares in an expensive stock market is not a good mix. Everyone is buying into the Twitter IPO hype, and the analysts predict a target price as high as $50. Facebook and LinkedIn appear cheap at about twelve times forward sales, while Twitter is valued at about thirteen times forward sales. That`s not cheap with a company with so many losses.

It`s effective to look at the companys price to earnings if you wonder what price should be. What you really do is comparing the price of the company today to its ability to produce earnings in the future (cash). But the corporate earnings are very influenced by the business cycle.

The U.S experiences a boom approxomately once every ten years. At times like that, the companys will have higher price to earnings than other times because of the business cycle. That is the reason why we see high stock prices. Sometimes it all end up to build a huge bubble.

“CAPE” adjusts for this by measuring the stock price against the average of ten years worth of earnings adjusted for inflation. Doing it this way, you will better see the companys ability to produce cash in any economic environment.

CAPE is a good measurement for long term investors. It measures future stock returns. CAPE outperforms P/E ratio, Government Debt/GDP, Dividend yield, The Fed Model and many other metrics used to predict the market value.

Take a look at the chart below. It tells us that the S&P500 has a CAPE of over 24, which means that the market is trading 24 times its average earnings of the last ten years.

CAPE

In other words; if you bought the entire stock market today, it would take you about twenty four years to make your money back. Is that cheap? No way, but every time (only a handful of times in the last 100 years) we`ve been closer to a market top, then a new bull market run.

Important news today: Unemployment Claims, Advanced GDP and ECB press conference at 8:30am. ECB president Draghi speaks at 2pm.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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