Facebook stock looks like a compelling swing long trade on a rising Twiggs Money Flow. Large players volume is also rising.
Facebook will likely spend over a billion dollars on content production. The company has recently launched ‘Watch’ a new subsection on its website for viewing videos. Facebook is moving to capitalize on shifting ad dollars as ad dollars shift away from TV. For the first time, ad spending on digital surpassed TV ad spending last year. You can see Facebook Watch in action here.
The chart of Facebook shows a good setup pattern on rising Twiggs Money Flow and large players volume. Recently a Pocket Pivot signal was observed. Prices have been consolidating lately setting up a momentum squeeze play:
Facebook stock has a resistance zone just above the current price starting at $173.52. Right above this resistance zone may be a good entry point. There is a support zone below the current price at $171.03, a stop order could be placed below this zone.
Facebook Stock Review
Facebook's Return On Asserts of 17.81% is among the best returns of the industry. Facebook outperforms 94% of its industry peers. The industry average Return On Assets is -1.22%. FB has a Return On Equity of 19.79%. This is better than the industry average of 13.24%. FB has a Profit Margin of 39.65%. This is among the best returns in the industry. The industry average is -0.85%. FB outperforms 94% of its industry peers. FB has a very good Piotroski-F score of 9.00. This indicates a great health and profitability for FB.
Facebook's Price/Earning Ratio is inline with the industry average which is at 38.60. Facebook's PEG Ratio, which compensates the Price/Earnings for growth, indicates a correct valuation of the company. When comparing the current price to the book value of Facebook, we can conclude it is valued correctly. It is trading at 7.54 times its book value. With a Price/Earnings Ratio of 38.60, FB can be considered very expensive at the moment. With a Forward Price/Earnings Ratio of 32.37, FB is expensive. Compared to an average industry price book ratio of 4.35, FB is more expensive than its industry peers.
Facebook shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 99.55%, which is impressive. Facebook shows a strong growth in Earnings Per Share. Measured over the last 5 years, the EPS has been growing by 238.89% yearly. The Earnings Per Share is expected to grow by 37.24% on average over the next 2 years. This is a very strong growth. Looking at the last year, FB shows a very strong growth in Revenue. The Revenue has grown by 49.69%. The Revenue has been growing by 45.49% on average over the past 5 years. This is very strong growth! When comparing the growth rate of the last years to the growth rate of the upcoming 2 years, we see that the growth is decreasing.
A Current Ratio of 12.31 indicates that Facebook has no problem at all paying its short term obligations. Facebook is one of the better placed companies in its industry to meet its short term obligations. Its Current Ratio is much better than the industry average of 1.71. Facebook has a better rating than 97% of its industry peers. A Quick Ratio of 12.31 indicates that FB has no problem at all paying its short term obligations. FB is one of the better placed companies in its industry to meet its short term obligations. Its Current Ratio is much better than the industry average of 1.68. FB has better rating than 97% of its industry peers. FB has an Altman-Z score of 42.74. This indicates that FB is financially healthy and little risk of bankruptcy at the moment. The Altman-Z score of FB is much better than the industry average of 3.46. FB has a better rating than 98% of its industry peers. FB has a very good Piotroski-F score of 9.00. This indicates great health and profitability for FB. The Debt to Equity ratio of FB is inline with the industry averages.