Facebook, Inc. (NASDAQ:FB) valuation says the stock is an absolute steal

Facebook, Inc. (NASDAQ:FB) valuation says the stock is an absolute steal

Facebook, Inc. (NASDAQ:FB) valuation says the stock is an absolute steal

Facebook has been hit with a perfect storm of operational issues. At its core, however, the company’s business is resilient and its long-term competitive advantage is unaffected. Through it all, Facebook remains extremely cash generative while at the same time remarkably undervalued.

For a long time, investors had been both attracted and accustomed to Facebook’s compounded annual growth rate (CAGR) of sales in the mid-40%s.

When Facebook acknowledged that this level of sales growth was no longer sustainable going forward, without having major investment, investors become fearful and rushed for the exits, leaving its stock oversold.

Moreover, CFO David Wehner highlighted to investors that Facebook is forecasting its expenses to rise substantially over 2018. At the high end of the range, investors should be bracing themselves for total expenses to reach approximately $47 billion, or a 50% increase year over year.

Said another way, in the most conservative scenario operating income in FY 2019 should come out flat at around $27 billion. This news caused investors to feel despondent toward the stock. But having said that, trouble brings opportunity.

Overall, the bias in prices is: Downwards

The projected upper bound is: 149.45.

The projected lower bound is: 130.19.

The projected closing price is: 139.82.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 55.2093. This is not an overbought or oversold reading. The last signal was a sell 1 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 46.61. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 16 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 23. This is not a topping or bottoming area. The last signal was a sell 0 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed down -3.870 at 140.190. Volume was 2% below average (neutral) and Bollinger Bands were 31% narrower than normal.

Open High Low Close Volume___
143.080 144.920 138.420 140.190 24,333,960

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 141.38 145.83 170.98
Volatility: 33 42 46
Volume: 23,922,806 25,370,740 27,873,094

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FACEBOOK INC A is currently 18.0% below its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of FB.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on FB.O and have had this outlook for the last 3 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

You must be logged in to post comments :  
CONNECT WITH