CymorFund Stock Picks – Sell Facebook

CymorFund Investment Newsletter Stock Picks recommended buying Facebook  at $26.00 on May 8, 2013 because of its immense market penetration and its dramatically growing mobile ad revenue. 

The above chart from Business Insider tells the story. In the latest published results from Facebook, mobile revenue grew substantially – exactly what CymorFund Investment Newsletter Stock Picks had advised its readers would happen on May 8, 2013.

 

 

CymorFund Stock Picks   Sell Facebook (FB) at $34.35

Facebook (FB) closed today at $34.35, or a 32% gain or our readers. In after hours trading (after the market close), the stock rose another $.04. Maybe the appetite by investors for FR is satiated. Maybe not. But the big gain has now been made.

The reason for this gain, was a substantial increase in the mobile revenue as described in the July 24, 2013 Reuters News Release, which is reproduced below. In essence, Facebook’s market penetration is nothing short of stunning. Unbelievably, the company claims that 700,000,000 people visit its website daily. The numbers are staggering.

We recommend selling and taking this 32% profit. A wise man says “You can’t lose money by taking a profit.” Facebook stock price has soared to its original projected IPO price, before the madness took the initial price higher to $38. We think this stock has room to go higher, but after hours trading is not robust, and maybe the stock will settle.

Whether the price rises, or settles, it is time to sit on the sidelines and watch for a while. There will be another opportunity to re-enter in the future. Right now, the comparison to normality is stunning. The P/E ratio according to Yahoo Finance is an unbelievable 746. The average P/E ratio is about 17 for most stocks over a long term. Facebook has to make a lot of profit before it reaches a reasonable PE ratio.

Making money in the market, takes a disciplined and patient approach. Greed kills. Take this 32% profit and wait for a re-entry point.

The Reuters  July 24, 2013 article follows. It is self explanatory.

Facebook soars 20 per cent as revenue surge beats expectations   Reuters  Published 

Facebook Inc. beat Wall Street’s revenue targets as its mobile advertising business gains steam and the Internet company reported a rise in the number of users who visit its online social network every day. Shares of Facebook jumped 20 per cent to $31.81 (U.S.) in after-hours trading on Wednesday. The world’s No. 1 social network said roughly 700 million of its 1.15 billion users now visit the service on a daily basis, compared with 665 million at the end of the first quarter.

Facebook grew revenue 53 per cent to $1.813 billion in the second quarter, above the average analyst expectation of $1.618 billion, according to Thomson Reuters I/B/E/S. Facebook had $1.184 billion in revenue in the year ago period. The company said that mobile ads accounted for roughly 41 per cent of its total ad revenue in the second quarter, up from 30 per cent in the first quarter of the year.

The world’s No.1 online social network said it earned $333-million in net income, or 13 cents a share, versus a net loss of $157-million, or 8 cents a share, in the year-ago period. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, Facebook said it earned 19 cents a share.

 

CymorFund Stock Picks may or may not have positions in the securities we name. In making an investment decision numerous factors must be considered including portfolio balancing, timing, cash and capital reserves, asset allocation and other factors. Readers are strongly advised to do their own research. Matters discussed contain forward-looking statements that are subject to risks and uncertainties and actual results may differ materially from any future results, performance or achievements expressed or implied.

Views expressed are opinions and not investment advice. Persons investing should retain a licensed professional to guide them and  not rely on the opinions expressed herein. This report is neither a solicitation nor a recommendation to buy or sell securities. We are not a registered investment advisor nor a broker-dealer. The information contained herein is based on sources which we believe reliable but is not guaranteed as being accurate or a complete statement or summary of the available data.

By Larry Cyna

Mr. Cyna is an accomplished investor in the Canadian public markets for over 20 years, and has managed significant portfolios. He is a financing specialist for private and public companies, and has expertise in real estate and debt obligations. He has assisted private companies accessing the public markets, has been a founding director of public companies and continues as a strategic consultant to selected clientele. He is and has been a director, a senior officer and on the Advisory Board of a number of TSX and TSXV public companies in the mining, resource, technology and telecommunications sectors, and the Founding Director of two CPC’s with qualifying transactions in mining and minerals. He was an honorary director of the Rotman School of Management MBA IMC program, has completed the Canadian Securities Institute Canadian Securities Course & Institute Conduct and Practices Handbook Course, was a former Manager under contract to an Investment Manager at BMO Nesbitt Burns, a roster mediator under the Ontario Mandatory Mediation Program, Toronto, a member of the Institute of Corporate Directors of Ontario, a member of the Upper Canada Dispute Resolution Group, and the Ontario Bar Association, Alternate Dispute Resolution section. He obtained his designation as a Chartered Accountant in Ontario in 1971 and was the recipient of the Founder’s Prize for academic achievement together with a cash reward. He became a CPA in the State of Illinois, USA in 1999 under IQEX with a grade of 92%. He is a Member of the Institute of Chartered Accountants of Ontario and the Canadian Institute of Chartered Accountants. He holds certificates in Advanced ADR & in Civil Justice in Ontario, Faculty of Law, University of Windsor, certificate in Dispute Resolution from the Ontario Institute of Chartered Accountants. Previous accomplishments are Manager of Cymor Risk Consultants LP specializing in Risk Management Assessment; CEO of Cyna & Associates specializing in mediation and ADR; Founder & Senior Partner of Cyna & Co, Chartered Accountants, a fully licensed and accredited public accountancy firm with international affiliations; and was a partner in a large public accountancy firm. Mr. Cyna is well known in the Canadian Investing community. He is invited to, and attends presentations given by public companies usually 3 or 4 times each week. These presentations are intended by the various hosting companies to present their inside story to sophisticated parties and Investment Managers for the purpose of attracting funding, or of making parties more interested in acquiring shares of those companies. Being a part of this keeps Mr. Cyna deeply involved in the current market and leads to numerous investment opportunities.