This week, Facebook (FB) a Buy based on the most recent news, and relative pricing of its shares. Facebook Inc's (NASDAQ:FB) Buy recommendation, which was recently downgraded from a Strong Buy to Buy, is a result of a proprietary process of evaluation and produced conclusions that were above average in 6 areas: an economic sector ranked above average in attractiveness, an industry group ranked above average in attractiveness, a ranking in its sector group that is in the top quarter, ranking in its industry group that is in the top quarter, a mathematical computation of risk/reward that is attractive and analytical scoring that is near average. The current overall Portfolio Grader recommendation on the shares has changed twice in the past month, which represents a greater level of change than is typical.
FB is one of the 321 companies in the GICS Technology Services sector and is a component of the 91 company Internet Software/Services GICS industry group within this sector. FB has a market value of $515.4 billion which is in the top 10% of its industry group Portfolio Grader's current ranking for FB puts it 21 among the 91 companies in this industry group, placing it among the leaders.
Portfolio Grader currently ranks the Technology Services sector number 1 among the 20 sectors in its universe putting it atop all the GICS sectors. The Internet Software/Services industry group is ranked 29 among the 129 industry groups within the GICS sectors, placing it above-average in terms of the Proprietary Quantitative Score scoring system.
Facebook has earned above-average scores in 5 of the 8 fundamental areas evaluated by Portfolio Grader and average or below-average grades in 3 of the areas used in the ranking of company stocks.
FB's operational scores provide mixed results with a ranking for operating margin that is below the industry average, while the rankings for sales growth and earnings growth are above average. Scores for visibility of earnings are mixed, with a ranking for earnings revisions and earnings surprises that are better than average, while the score for earnings momentum is much worse than average. FB's ranking for return on equity is much better than its industry group average but its grade for cash flow is below-average. These fundamental scores give Facebook a position in the top quartile of the industry group.
Portfolio Grader quantitatively views FB's shares using the Proprietary Quantitative Score. This metric looks at FB's shares from the angle of risk/reward. This unique scoring system balances the relative value of the company's shares based on the recent $177.36 share price of the shares relative to its peers, the market and risk associated with its industry and sector groups. Using this risk/reward calculation, FB currently scores well above-average in its industry group compared to its peers.
The Proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results, with A being 'strong buy' and F being 'strong sell'. Explore the tool here.
Commentary provided by UpTick Data Technologies.
