Bireme Capital: “Meta (FB)’s Core Business Remains One of the Best in the World”

Bireme Capital, an investment management firm, published its 1st-quarter 2022 investor letter – a copy of which can be downloaded here. Fundamental Value had a solid quarter, essentially flat against a loss of -4.6% for the S&P 500. The fund’s short positions made the difference. Its average short name was down -by 17% and the short book contributed 5.5% to the quarter’s return. FV has compounded at 24.7% net of fees since inception in 2016, outperforming the S&P 500 by 8.6% annually. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Bireme Capital mentioned Meta Platforms, Inc. (NASDAQ:FB) and explained its insights for the company. Founded in 2004, Meta Platforms, Inc. (NASDAQ:FB)  is a Menlo Park, California-based multinational technology conglomerate with a $507.5 billion market capitalization. Meta Platforms, Inc. (NASDAQ:FB) delivered a -44.41% return since the beginning of the year, while its 12-month returns are down by -38.30%. The stock closed at $186.99 per share on April 25, 2022.

Here is what Bireme Capital has to say about Meta Platforms, Inc. (NASDAQ:FB) in its Q1 2022 investor letter:

“During the quarter we reinvested in Facebook. This is not the first time we’ve held a position in the company, which operates the largest and most profitable social media business in the world. We first bought shares in Q4 2018, after the Cambridge Analytica scandal caused the stock to drop to less than 20x earnings.

That investment was successful, with users and advertisers largely shrugging off the scandal and causing revenues to grow from $40b in 2017 to $86b in 2020. EPS rose from $6 to more than $10 in 2020, and we sold our shares between $250 and $300 in mid-2020 to reinvest in stocks that had seen share price dislocations due to the COVID-19 pandemic.

In Q1, Facebook investors once again got spooked, with shares falling almost 50% to under $200 per share. Today, shares trade at their lowest valuation ever: 12x earnings net of cash. We think the core business remains one of the best in the world and that issues surrounding TikTok competition, Zuckerberg’s investments in virtual reality, and changes to iOS tracking policies are largely overblown or over-discounted in today’s price. For our full thoughts on Facebook, please see our blog post here.”


Photo by Alexander Shatov on Unsplash

Our calculations show that Meta Platforms, Inc. (NASDAQ:FB) ranks 3rd on our list of the 30 Most Popular Stocks Among Hedge Funds. Meta Platforms, Inc. (NASDAQ:FB) was in 224 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 248 funds in the previous quarter. Meta Platforms, Inc. (NASDAQ:FB) delivered a -39.43% return in the past 3 months.

Earlier this month, we also shared another hedge fund’s views on Meta Platforms, Inc. (NASDAQ:FB) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.