Facebook Inc (NASDAQ:FB) has doubled its share price since its IPO three years ago. Facebook Inc (NASDAQ:FB) announced last week about its payment options, which might help the company in long term. Post this announcement, Facebook Inc (NASDAQ:FB) stock started rallying and is hitting new highs every day. Can they breach that $100 mark or is it the right time to sell the stock? Portfolio Manager at Fidelity Contrafund, Will Danoff talked on CNBC about why he thinks Facebook Inc (NASDAQ:FB) will continue to grow beyond these highs.
Danoff said that he did not know many businesses which have 1.3 billion monthly users and 900 million daily users. He feels that it is a valuable franchise and platform. He thinks that we are just starting to see the monetization of that platform. He said that Zuckerberg is a great visionary and no other businessman had billion customers at the age of 29.
Danoff thinks that companies relatively new to the market place, less than 10 years are at the most attractive point in terms of growth rate, cash flow generation and ability to participate in the growth market. He pointed out that Facebook Inc (NASDAQ:FB) is number 1 in the mobile apps, which is a very strong position. He feels that Facebook Inc (NASDAQ:FB) cannot go down from this position and they can only grow.
Can Facebook Inc (NASDAQ:FB) stock breach the $100 mark? Danoff thinks that it can.
“I have been managing Contrafund for almost 25 years, over 300 basis points a year over the S&P 500. So I have seen a lot and what I have learned is that stocks follow earnings per share and I think a contrarian call is to say if the stock has doubled or tripled you haven’t missed it. You know Bill Gates didn’t sell after Microsoft first doubled, Michael didn’t sell after Dell doubled. Facebook has doubled, but I think the outlook arguably is even better. You now have a card turned over, which is Facebook can monetize on the smartphone,” Danoff said.
He added that buying Whatsapp and Instagram might prove to be very useful for Facebook Inc (NASDAQ:FB) in future. He said that stock has doubled but it is doing even better at the moment.
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