5 Stocks to Buy When Everyone is Selling

1. Meta Platforms, Inc. (NASDAQ:FB)

Number of Hedge Fund Holders: 224   

Meta Platforms, Inc. (NASDAQ:FB) is a tech firm that owns and runs social media platforms. In 2021, the firm posted topline growth of 31%. However, this growth has stalled this year and the firm has put on a hiring freeze to deal with the challenging macroeconomic environment. At the core, the firm remains a digital advertising firm, despite a recent pivot to the metaverse, and growth in this sector is likely to remain strong for years to come. The firm is also devising a long-term plan to compete with social media giant TikTok. 

On May 16, Morgan Stanley analyst Brian Nowak kept an Overweight rating on Meta Platforms, Inc. (NASDAQ:FB) stock with a price target of $330, noting that the “combination of a revenue acceleration in the second half and cost discipline” could lead to significant free cash flow for the firm.

At the end of the fourth quarter of 2021, 224 hedge funds in the database of Insider Monkey held stakes worth $31.8 billion in Meta Platforms, Inc. (NASDAQ:FB), compared to 248 in the preceding quarter worth $38.5 billion. 

In its Q1 2022 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:

“Meta Platforms, Inc. (NASDAQ:FB), the parent company of Facebook, reported excellent operating results in 2021. Its revenue increased 37%, operating earnings increased 40%, and the company generated $40 billion of free cash flow. Despite these excellent results, Meta experienced extreme volatility in its stock price during the first quarter. We believe that two factors are responsible for this volatility. First, the company quantified the headwind to revenue from Apple’s recent privacy changes in the amount of approximately $10 billion for 2022. Meta is rebuilding its advertising technology, and we believe the long-term headwinds from Apple’s privacy changes will be limited because Meta Platforms, Inc. (NASDAQ:FB) will create a suitable solution. Second, Meta continues to invest heavily into its Reality Labs segment, also known as the metaverse. While we believe the metaverse presents great opportunity for Meta Platforms, Inc. (NASDAQ:FB), we are not assigning any value to it in our valuation work. While 2022 may be challenging for Meta, the company’s competitive advantages are still intact, and the company trades at a significant discount to our estimate of its intrinsic value. Despite our concerns about a possible recession, we expect Meta to return to double-digit bottom line growth next year.”

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