2. Meta Platforms Inc (NASDAQ:META)
Number of Hedge Funds Holding Stakes as of Q2: 219
Market Cap as of September 18, 2024: $1.36 Trillion
Meta Platforms, Inc. (NASDAQ:META) is a communication services company that develops products to connect people and share among friends and family. It is best known for its flagship Facebook app, Instagram and WhatsApp. It also offers augmented and virtual reality products.
It is one of the best forever stocks to buy now as it controls 18% of the global digital advertising market. The company generates billions of dollars in advertising revenues through its flagship apps, Facebook and Instagram. Over the past five years, its revenue has increased at a compound annual growth rate of 18.3%, allowing it to generate significant shareholder value.
Meta Platforms, Inc. (NASDAQ:META)’s online advertising market supremacy resulted in its second-quarter revenues soaring by 22% year-on-year to $39.1 billion. Its total assets reached $230.2 billion, while its total liabilities stood at $73.5 billion.
Furthermore, Meta concluded the second quarter with a surplus of cash. Its cash, cash equivalents, and marketable securities amounted to $58.1 billion. Its second-quarter free cash flow (FCF) was $10.9 billion, which more than covered the $1.3 billion in dividends paid out, leaving ample funds for Meta to allocate towards its operations, reduce its debt, and buy back its own shares.
Meta Platforms, Inc. (NASDAQ:META) is completely dedicated to advancing its artificial intelligence (AI) initiatives as it looks to safeguard its future. It is investing significant resources to expand its network framework and processing capabilities, with a budget ranging from $37 billion to $40 billion for this fiscal year. Moreover, the substantial investments are expected to continue for an extended period.
While trading at a discount at a price-to-earnings multiple of 22, Meta Platforms stock yields 0.38% in dividends for income-focused investors.
In the second quarter, Meta Platforms, Inc. (NASDAQ:META) appeared in the portfolios of 219 hedge funds, with total stakes valued at $42.5 billion.
Rowan Street Capital mentioned Meta Platforms, Inc. (NASDAQ:META) in its second-quarter 2024 investor letter:
“We are pleased to report that Meta Platforms, Inc. (NASDAQ:META), our largest position in the fund, has delivered a remarkable performance, +450% since our November 2022 note. Our investment in Meta dates back to 2018, with an average cost basis of approximately $172 per share. Today, the stock trades around $535, reflecting a 3x return over the six-year holding period, equating to a 20% annualized return.
We would like to remind you that achieving these types of returns is never a straight path. From time to time, we might experience volatility — that’s simply part of the investment journey. In fact, wealth creation and volatility go hand in hand. There’s no escaping it; it’s the “price of admission” the market demands. If you take a look at the chart below, you’ll notice the drawdowns META stock has faced over the years, with 2022 standing out as a particularly challenging period, where the stock saw a 75% drop…” (Click here to read the full text).
