Thursday, May 31, 2018

Facebook Stock Headed To All-Time Highs With Good Reason

facebook stock
We said Facebook was "on its way to new highs" exactly ten days ago. We said the stock secretly passed a key level as a sign it wants to go higher.  Sounds basic but good news, no more bad news, and huge earnings potential are reasonable drivers that can get Facebook to new all-time highs. We'll explain.

What Good News?

We said on Tuesday GDPR will hurt the smaller players most. We also said Facebook will likely benefit the most even more than Google. The Wall Street Journal said today that smaller players will, in fact, be worse off than Google.

We also don't think Google will have much of a hit after seeing reports otherwise because most of Google's business is Search. Search is less dependent on outside publishers than their smaller programmatic business.

So GDPR will likely end up being good news for Google but great news for Facebook. We don't hear anybody talking about how good it is for Facebook. Think about it. They nailed the opt-in issue because they can simply tell users take-it or leave-it. Most users will opt-in when facing those options.

Facebook also can win more advertisers because of the lower inherent risk of having their users more easily opt-in to see ads. Facebook offers a lower risk profile to advertisers.

No More Bad News?

Have you heard the name Cambridge Analytica pop up much anymore? Not as much, right? No more bad news is good news.

Earnings Can Still Be Blow Out

Facebook surprised many last quarter but we were bullish ahead of earnings and have been bullish. Our EPS number is way higher than the Street which gives us huge upside potential.

fb chart
Source
Inches Away

We had said ten days ago that Facebook's stock price level of $183 was a secret breakout. The market proved that correct. Now we're inches from new highs. Amazing considering how negative everybody was this year.

Wrap It Up

Good news, no more bad news, and earnings; It's lining up inches from new all-time highs.




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