Cash-Rich Stocks to Buy: Facebook (FB)
Cash-to-Market Cap: 7.4%
Facebook Inc (NASDAQ:FB), Mark Zuckerberg’s pride and joy, finished the first quarter of 2017 with $32.3 billion in cash and no long-term debt.
If you’ve been paying attention to some of Facebook’s competitors, you’re likely aware that Snapchat parent Snap Inc (NYSE:SNAP) took a big dive May 11 on significant losses and slower user growth. That’s great news for Facebook shareholders because it reveals Snapchat for what it is: a poor cousin to the king of social media.
“As a feature in The Economist about the value of data pointed out this week, Alphabet Inc (NASDAQ:GOOGL) and Facebook accounted for nearly all the revenue growth in digital advertising in the United States last year,” GameChangers editor Hilary Kramer recently wrote. “In fact, such tech giants are so dominant, Facebook is being argued as a monopoly in some circles.”
I’ve never thought there was a good reason to buy SNAP, a money loser when you can own Facebook, a free-cash-flow generating machine. It’s like ordering a hamburger when you’re in the best steakhouse in the city.