Facebook newsfeed changes make short-term investors fear. But Robert Frazier said the new revenue stream and high cost-per-click would raise his 12-month target price to $ 215.
Ken Kam: Robert, your marketing job gives you Facebook first-hand experience from a customer’s point of view. How big is your position on Facebook and you will be able to buy more at the current price.
Robert Frazier: We’ve talked a bit about conversations about Facebook and every time such a message comes out, there’s an opportunity to reconsider one of my key positions in my portfolio.
Over the past few years, I have been forced to sell Facebook shares on several occasions to balance my portfolio as last year’s stock price has risen 45%. Facebook is 17% of my fund as of Thursday 11th. I plan to increase this to 20%.
My new 12-month target price for Facebook is $ 215, which is a 27% premium at the close on Friday and should outperform the market.
Kam: What makes you so optimistic about the FB as a result of the uncertainty of the press interview to promote the participation of media companies and advertisers?
Fraser: As an advertiser and a guy who spends a lot of money on Facebook, I’m cautiously optimistic about what that means for an important marketing platform.
Facebook struggled to profit from every part of its business, and news coverage was the first advertising platform to peak. This is a real issue for such important metrics as cost-per-click.
As the noise floor of Facebook ads has risen, the engagement and targeting of these ads has dropped. What I saw with clients was that ads were delivered less in the past year. There will be less advertising space available for purchase, which will make them more valuable and increase the experience of those using the app.
Kam: Mark Zuckerberg suggests that this may mean that people spend less time on FB news feeds, and is not good for advertisers? Is Facebook’s profitability good or bad?
Fraser: I think you will see people using their newsletters much like the previous 2010, when it was a social network for building contacts.
Facebook has invested heavily in groups and events to ensure that friends’ organizations and real social life are closely linked to their platform. This is driving deeper engagement with notifications and standalone applications on mobile devices. This is generally a good thing. Facebook’s quality is over quantity, making advertising appropriate, targeted and of higher quality.
I suspect that CPC will be normalized at a much higher rate, close to the Google Ad Vocabulary, which will be a net increase in news source revenue.
Kam: Facebook other business? Which advertisers will Facebook drive to use their platform?
Fraser: I think in 2018, you’ll see Facebook cracking Messenger and WhatsApp platforms more active than Facebook’s major social networks. You’ve started to see advertisements that pop up in Messenger, and location based services based on planned launches in those applications can be very profitable to the FB.
He founded the mid-term value fund in August 2005 on marketism. Over the past 11 years and more, his money averaged 12.56%, which is comparable to 9.13% of the S & P 500 during the same period. In the past three years, five years and ten years, his fund will be ranked in the United States a quarter of the stock mutual fund managers. Before taking anybody’s advice, you should check their records frequently. This is Robert’s.
In my opinion, this is his first experience working with Facebook, giving him an edge over Wall Street analysts at any reasonable time. Analysts have never worked in an industry and will never understand, as well as those first-hand experiences.