RGA Investment Advisors: “Meta Platforms (META) Continues to Grow at a Slower Rate”

Investment management company RGA Investment Advisors recently released its second-quarter 2022 investor letter. A copy of the same can be downloaded here. The fund is not happy with its portfolio’s relative performance in the second quarter. High inflation and actions of the Federal Reserve to manage the inflation affected the market’s performance in the second quarter. You can check the top 5 holdings of the fund to know its best picks in 2022.

RGA Investment Advisors discussed stocks like Meta Platforms, Inc. (NASDAQ:META) in the second quarter investor letter. Meta Platforms, Inc. (NASDAQ:META) is a technology conglomerate headquartered in Menlo Park, California. On August 22, 2022, Meta Platforms, Inc. (NASDAQ:META) stock closed at $163.05 per share. One-month return of Meta Platforms, Inc. (NASDAQ:META) was -2.16% and its shares lost 55.13% of their value over the last 52 weeks. Meta Platforms, Inc. (NASDAQ:META) has a market capitalization of $438.205 billion.

Here is what RGA Investment Advisors specifically said about Meta Platforms, Inc. (NASDAQ:META):

“Meta Platforms, Inc. (NASDAQ:META) f/k/a Facebook– we followed Facebook for years and were often asked “why own Twitter when you can buy Facebook?” Sure enough, Twitter’s return was far better over our holding period and we now deployed a decent portion of our Twitter proceeds into META. META today strikes us as one of the cheapest stocks in the entire market and one of the more interesting setups we have seen. META was hit with a triplewhammy of tough COVID comps, changes in Apple’s privacy policies and emerging competition from TikTok. Despite all this, the company continues to grow, albeit at slower rates. At its lows this year, META was trading for a low teens forward P/E (15x 2022 numbers today) and this is despite investments in the Reality Labs division at around a $10b annualized rate. If we exclude the Reality Labs investments, the core META properties of Facebook, Instagram and WhatsApp would earn somewhere around 23% more in bottom line EPS. This would chop about 2.5 turns off the company’s P/E. Speaking realistically, there is no sign Mark Zuckerberg would entirely stop these investments; however, we do think Zuckerberg is realistic about his stock price and very well might defer a large portion of the investment until core earnings reaccelerate. Further, we think it is appropriate to value the company on a sum of the parts basis and rather than fully expense the Reality Labs investments against the core properties, we should think about what the actual value of that investment might yield. Either way, even fully expensing Reality Labs, this company is far too cheap to ignore.”

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Meta Platforms, Inc. (NASDAQ:META) is in 4^th position on the list of  30 Most Popular Stocks Among Hedge Funds. As per our database, Meta Platforms, Inc. (NASDAQ:META) was held by 184 hedge fund portfolios at the end of the first quarter, which was 200 in the previous quarter.

We discussed Meta Platforms, Inc. (NASDAQ:META) in another article and shared Argosy Investors’ views on the company. You can check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other prominent investors.

Disclosure: None. This article is originally published at Insider Monkey.