Is Facebook Inc (FB) the Top Technology Pick Now?

Industry Implications

These results hold great significance for other major technology companies that are dependent on advertisement revenues. I believe at this stage the US advertisement industry is a risky business, despite my bullish outlook on advertisement pricing. This high risk increases the attractiveness of stocks such as Baidu.com, Inc. (ADR) (NASDAQ:BIDU) and SINA Corp (NASDAQ:SINA), which drive advertisement revenues from the Chinese market. This doesn’t mean these technology giants are without their risks–there are rumors that Chinese companies can be expelled from the US markets due to their shady accounting practices. Despite these concerns both stock are trading at cheap valuations, and the successful mobile monetization trends displayed by Facebook makes them an interesting option.

However, as the table below shows, Facebook is still the best social media play even if we count Chinese companies. The valuations of search engine giant Baidu are the most attractive of the lot and it’s a strong buy in its own right. The primary reason Baidu is so attractive is its extremely low PEG ratio, which indicates the growth potential available in the Chinese market. Sina has disappointed investors by lowering its fourth quarter guidance. Investors were expecting Sina to report revenues of $152 million for the fourth quarter, but the company expects revenues to be between $132-$136 million. In other news, Sina has reached an agreement with AutoNavi Holdings Limited to enchance and improve their social, location, and mobile (SoLoMo) offerings.

Company P/E PEG
Facebook 35x 1.61x
Baidu 18x 0.66x
Sina 75x 26x

Source: Yahoo! Finance

Bottom line

I believe the 4% after-market drop is an aberration, and these earnings make Facebook one of the best long term technology options. The market will correct itself and Facebook will soar ever higher. The valuations above show that Facebook is the best social media bet in the market.

The article Is Facebook the Top Technology Pick Now? originally appeared on Fool.com and is written by Mohsin Saeed.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!