Is Facebook Inc (FB) Good Stock To Buy?

If Facebook Inc (NASDAQ:FB) has been in news a lot recently, it is mostly owing to the transformation that is in progress in order to improve the user experience offered by the platform. Another reason as to why it was the topic of discussion between Jill Malandrino, Products Development Manager of The Street’s Options Profits and Stephanie Link, Action Alerts Plus also of The Street, was because it appeared to be attractive as an investment option. On being questioned in the studio of The Street, Stephanie Link not only felt it was lucrative but that profits could be accrued by all types of investors, namely short, medium and long term.

To justify her position, she quoted the fact that the site was undergoing modernization which was only likely to improve interaction for existing users and also draw more users to the site. An added advantage accrued from its near-term engagement as also its 15% rise between the duration spanning the months of May and June. Thus the entire package with margins included was poised to suit investors well and fetch returns at least 2-3 times more than the original investment. Its current fluctuations should be capitalized on for accruing substantial returns.

Another factor that renders Facebook Inc (NASDAQ:FB) attractive is its earnings’ quality and the model applied is same as that used to analyze the same for Coca-Cola. It is explained as –

“The model measures earnings quality by twenty relevant criteria on a scale from 1 to 5. The selected criteria are assumed to cloud the company’s true earnings and/or to be potential indications for active earnings management. The criteria are selected out of eight different models to measure earnings quality and, therefore, the model is very complete. Based on the final score, earnings quality is qualified as excellent, good, fair, marginal and poor.”

Equally instrumental in projecting Facebook Inc (NASDAQ:FB) as a viable option in investors’ eyes is the company’s decision to join the exodus from a lobby group ALEC owing to the latter’s stand against climate change. The move was explained as such –

“We reevaluate our memberships on an annual basis, and are in that process now. While we have tried to work within ALEC to bring that organization closer to our view on some key issues, it seems unlikely that we will make sufficient progress so we are not likely to renew our membership in 2015.”

Facebook Inc (NASDAQ:FB) is one amongst the many well-known names who have taken this decision based on growing environmental concerns.

This article has been written by Vinita Basu.

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