Billionaire David Abrams’ Top 5 Stock Picks

 2. Facebook Inc. (NASDAQ:FB)

The social media giant Facebook Inc. (NASDAQ: FB) is the second-largest stock holding of Abrams Capital Management 13F portfolio. The firm first initiated a position in the social media company during the fourth quarter of 2018 when Facebook shares were under pressure due to regulatory issues.

Other hedge funds are also bullish on the future fundamentals of Facebook. It was in 230 hedge funds’ portfolios at the end of the third quarter of 2020, up from the previous all-time high of 213.

Wedgewood Partners, who said Facebook was one of the biggest detractors to its performance in Q3 2019, pointed out a few key factors about the social media giant. Here is what Wedgewood Partners stated in an investors letter:

“Facebook reported 32% growth in constant currency ad revenue, along with expectations for 50-55% growth in expenses as the Company continued with their telegraphed plan to accelerate investments in privacy and security across their social platforms. The Federal Trade Commission (FTC) also approved a $5 billion fine for violating a 2012 FTC order by misrepresenting users’ ability to control data privacy. While this removed an overhang dating back to early 2018, continued pressure from politicians and regulators kept Facebook’s earnings multiple in check.”