Facebook (FB) Has Risen 33% in Last One Year, Outperforms Market

If you are looking for the best ideas for your portfolio you may want to consider some of RiverPark Advisors top stock picks. RiverPark Advisors, an investment management firm, is bullish on Facebook Inc (NASDAQ:FB) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Facebook Inc (NASDAQ:FB) stock. Facebook Inc (NASDAQ:FB) is a social media company.

In July 2019, RiverPark Advisors had released its Q2 2019 investor letter. The investment firm said that Facebook Inc (NASDAQ:FB) stock was one of the top contributors to the Large Growth fund’s performance in Q2 2019. Facebook Inc (NASDAQ:FB) stock has posted a return of 32.5% in the trailing one year period, outperforming the S&P 500 Index which returned 8.3% in the same period. This suggests that the investment firm was right in its decision. On a year-to-date basis, Facebook Inc (NASDAQ:FB) stock has risen by 20.6%.

In Q2 2019 investor letter, RiverPark Advisors said the Large Growth fund posted a return of 7.4% in the second quarter of 2019, outperforming fund’s benchmark the S&P 500 Index which returned 4.3% in the same period. Let’s take a look at comments made by RiverPark Advisors about Facebook Inc (NASDAQ:FB) stock in the Q2 2019 investor letter.

“Facebook: After returning 27% as our top contributor for the first quarter, FB returned another 16% and was also among our top contributors for the second quarter. Despite months of negative press about the company in 2018, Facebook posted two consecutive strong earnings reports with results well-ahead of cautious Street expectations. First quarter revenues grew 30% on a constant currency basis (amongst the highest organic growth rates in the S&P 500) to $15 billion, monthly and daily average users each grew 8%, and average revenue per user grew 17%. Despite a dramatic increase in operating expenses to invest in greater privacy and compliance initiatives, the company generated a much-better-than-expected 42% operating margin (excluding a $3 billion accrual for potential FTC fines) for the quarter. Notably, the company generated a record $9.3 billion of operating cash flow despite its step up in capital investments.

Based on these impressive results and FB’s strong outlook, we perceive the company’s market multiple of 16x our 2020 EPS estimate to be particularly compelling. 2.1 billion people use at least one of Facebook, Instagram, WhatsApp or Messenger every day, and we see enormous growth potential from its core FB franchise – and even greater potential from its lightly monetized Instagram, Messenger and WhatsApp platforms. We also believe that returns from the company’s continued massive investments (FB spent $24 billion last year on R&D and capital expenditures) are not priced into FB shares. We maintained our position, and Facebook is a top five holding in the Fund.”

Last month, we published an article revealing that Facebook Inc (NASDAQ:FB) is one of the top 10 most profitable companies in America in 2020.

In Q2 2020, the number of bullish hedge fund positions on Facebook Inc (NASDAQ:FB) stock decreased by about 1% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Facebook’s growth potential. Our calculations showed that Facebook Inc (NASDAQ:FB) is ranked #3 among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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