Should I buy FB stock now? What about Amazon? Price targets included.
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Facebook IMO is a buy between $200 and $220. It’s not done falling. It’s now at a P/E of 17 which puts this formerly HUGE growth company square center in the value territory. We found out last night after $SNAP, $PINS and $AMZN reported that it’s simply a Facebook problem (ie Meta). This was NOT an overall social media or advertising problem. That’s why I think you’re okay getting in at those levels.
Now on to Amazon. The quarter was good — if Google was a 10, this was an 8. Like I said on the podcast, they were due to increase the Prime yearly rate and that will have a very large impact on cash flow. They also have increased costs, but they have hired almost 500,000 additional employees last year. I don’t think the current price is justified for them, but I do think if it dips below $3,000/share, I think you can start nibbling. If it gets back to $2700, buy all day long because it will go to $3,000 again. Right now, I think it’s just too high with the current situation and the PE at 54 is just too high compared to others like Apple (28) or Google (25).
Now on to Cleveland Cliffs. They report next week and anything close to $18 I think you can see that easily move to $20 next week on earnings. They have a PE of 4 and it’s going to be a solid quarter with talk of supply chains easing IMO. This is one that I don’t think you buy close to $19, but wait for it to get down towards $18 to get in before earnings. BE PATIENT. We had a buy as you can see on the chart below in the algorithm at $16.99 and you’d be happy if you got in there. I just see the MacD is still low enough at $18 that you should do well.
Ford reported last night and this is one I think is all hype — but you can make money with hype. I think if you can get this around $18, it should pop up with some type of hype announcement back to $20. It’s down big today and the 52 week range is rather attractive. The other thing is that with chip shortages, demand outweighs supply which is a VERY good story. If they can manage chips, they will blow away next quarter which would spur a further share price. This is a stock you trade — don’t own — because there’s just too much hype around it. There’s a gap around $15 for this stock, but I’m not sure it pulls back to fill that one. Again — anything under or around $18 I think is a good buy. BE PATIENT.
Now the final one we’ve talked about buying for this week — Qualcomm. This is one I continue to say if you can get it under $180, you’ll be fine. I think this is a $220 stock when NVDA reports in a couple of weeks. The PE is 20 which is significantly below it’s peers (AMD, Broadcomm and NVDA). Intel is even lower but there are structural and product issues with Intel which I believe is a dividend play. Qualcomm has hovered at $180 since earnings so anything under there should get a pop with a positive NVDA earnings call.
Our final stock is Simon Property — SPG. This stock had a recent MacD crossup and the 50 day is moving towards the 200 day. This increases chances of a death cross, but if you look historically around earnings in the past, the 50 day touches and then bounces up. I believe this earnings period is a good one for SPG and will provide a bounce. Their PE is 23 and they continue to show growth so it’s a justified PE vs. the S&P. With a 5% dividend yield as well, this is one you would be okay holding for a while even IF there’s not a pop.
