Category Archives: Solar Stocks

Facebook Inc (FB): Can Facebook Justify Wall Street’s Love

Investors began to “Like” shares of Facebook, Inc. (NASDAQ:FB), which touched all-time high of $45.62. They surged 89 percent in the past three months and 17 percent in the past one month.

Over the last 12 months, Facebook shares have gained 115 percent versus 16 percent for the S&P 500. Average volume of shares traded over the last three months came in at 58.59 million while today’s volume was hovering around 48 million.

The rally in FB shares began when the social networking giant reported solid second quarter results in late July, when the shares were trading at around $25. Since the last quarterly report, shares have climbed 70 percent.

At the current valuation, FB shares trade 48 times and 4.7 times its forward earnings and sales respectively. Analysts expect Facebook earnings to grow 50 percent this quarter and 34 percent in 2013, with sales seen improving at a similar rate. For 2014, the Street forecasts the company’s earnings to increase 3 4 percent on sales growth of 31 percent.

Now that Facebook trading at an all-time high, the question for investors is whether the company could justify the recent rally.

The jury is still out, while Facebook has the firepower to reward investors. Facebook has a user base in excess of 1.15 billion, with mobile monthly active users (MAU) at 819 million (71 percent). Mobile-only monthly active MAUs for the second quarter were 219 million, up from 102 million a year ago.

Facebook proved that it is monetizing its mobile user base as its mobile revenues of $656 million accounted for 41 percent of ad revenues. North America price per ad jumped 40 percent from last year, indicating that demand, pricing and advertiser returns all seem to be improving at the same time.

Growing mobile ad revenue from nil at the time of the IPO to more than $650 million in four quarters is no mean feat. The fact that mobile is driving Facebook revenue growth is a distinct positiv e considering the secular shift to mobile usage that we are ! seeing in the industry.

The advertiser adoption of new product launches in both the recent past such as FBX in Newsfeed and mobile app installs also underscores Facebook’s revenue potential.

Facebook remains under-monetized user base relative to peers given the time spent on the platform. Though Facebook currently generates more revenue per user than Yahoo, Inc. (NASDAQ:YHOO) or AOL, Inc. (NYSE:AOL), it is still significantly under-monetized versus Google, Inc. (NASDAQ:GOOG) its largest advertising peer.

Facebook ads exhibit strong pricing power. On the second quarter earnings call, CEO Mark Zuckerberg disclosed that on-average, ads comprise about 5 percent of the stories in a user’s Newsfeed, up from 0 percent a year ago.

The next form of monetization could come in the form of video ads in Newsfeed. Newsfeed (both desktop but more importantly mobile) is the biggest driver of future revenue growth, so judging the stage of adoption for newsfeed monetiz ation is critical to the overall investment thesis.

Facebook plans to prioritize expanding the number of marketers on the platform rather than simply increasing the number of impressions. This approach would act as a key catalyst in boosting ad momentum both in terms of growing revenue and in terms of preserving engagement.

Looking ahead, Facebook should see increased contribution from video advertising as Facebook is expected to begin selling Newsfeed video ads in the second half of 2013.

“Some of our early checks have indicated that Facebook might be able to generate approx. $2-4mm per day from video ad products (in North America alone) in 2014,” UBS analyst Eric Sheridan said in a client note.

Furthermore, a recent study released by Nielsen compared Facebook to the four top TV networks and found that Facebook’s reach exceeds that of the TV networks during daytime for most age groups (particularly in the 18-35 range). These findings provide a compel ling business case for TV advertisers to adopt Facebook vide! o ads goi! ng forward – both to extend their reach and to reinforce their message with consumers.

Meanwhile, Facebook’s FBX may take share from email retargeting following Gmail Inbox changes. Google rolled out a new Gmail Inbox that would automatically categorize a user’s mail into separate tabs for social notifications, deals/promotions, etc.

In addition, the company is yet to unveil its key weapon – ads on Instagram. Facebook recently introduced video on Instagram. The introduction of video will likely make the service more compelling, leading to greater user engagement and also opening the door to lucrative video advertising.

Facebook does not currently monetize Instagram, but it could be a solid long term contributor. Video is clearly a large opportunity on the Internet, with YouTube, which is expected to generate up to $5 billion in revenue this year, as the prime example.

With more weapons in its armory, Facebook looks poised to leverage its 1 billion plus user base while it should see to that it drives more business from desktop to mobiles.

If all goes well, Facebook shares could even touch $50. However, a slight failure could cost shave away billions from market capitalization, which currently stands at about $110 billion. So, investors should watch the results of next two quarters to decide whether Facebook manages to sustain the momentum in its business.

The Interesting Value ETF You Don’t Know

NEW YORK (TheStreet) — This past spring First Trust restructured its Strategic Value Index Fund and renamed it the First Trust Capital Strength ETF (FTCS).

The new fund falls into the “smart beta” category I have written about recently. Such funds use custom screens to select components from broad-based indices in an effort to outperform their benchmarks. [Read: Investment Ideas From Day 1 of the NY Value Investing Congress]

FTCS starts by identifying the 500 largest U.S. stocks that have at least $5 million in daily trading volume. The ETF screens those 500 stocks to find the ones with at least $1 billion in cash or short-term investments, a ratio of market cap to long-term debt of less than 30% and a return on equity greater than 15%. From there, it scores the stocks for volatility, and the fund purchases equal amounts of the 50 stocks that have the lowest volatility.

FTCS also has rules to avoid being overly concentrated in any single sector, capping exposure at 30%. The index is reconstituted quarterly. The current sector makeup favors industrials, at 20%, followed by consumer services at 19%, health care at 17%, consumer goods at 17% and tech at 10%. The fund has no exposure to utilities or telecom. Omitting those two sectors is logical because they tend to be very debt-heavy. FTCS is oriented toward large-cap stocks, so most of the names in the fund should be familiar to you, such as MasterCard (MA), Qualcomm (QCOM) and Nike (NKE). Interestingly, defense contractors make up 8% of the fund, which could smooth out the ride for FTCS if the situation in Syria escalates into a situation that is bad for the markets in general but good for defense stocks. First Trust has said that it converted its more traditional large-cap value fund into the Capital Strength fund after realizing that many investors are concerned about how fast the market has gone up in recent years and worried that the fundamentals do not necessarily support the big rally. [Read: 5 Breakout Trades to Take Ahead of the Fed] First Trust says that companies with the attributes identified by FTCS will better weather a large downturn or a period of increased volatility because those companies have more options with their cash and less financial risk because of their low debt.

Although First Trust hasn’t said as much, it’s also possible that it made the conversion after deciding that the original fund’s lack of assets — $37 million — indicated the market didn’t need another basic large-cap value fund.

Although the capital strength process yields a value tilt, it is not a carbon copy of other large-cap value funds offered by competitors.

The iShares S&P 500 Value ETF (IVE), the Power Shares Dynamic Large Cap Value Portfolio (PWV) and the Vanguard Mega Cap Value ETF (MGV) all have weightings greater than 20% in the financial sector compared to just 8% for FTCS. The other funds have much less exposure to the industrial sector than FTCS. [Read: Ex-JPMorgan Traders Could Face 20 Years in Prison]

Since FTCS started trading in its current incarnation these differences have not mattered because all four of these funds have traded in lockstep. Historically the industrial sector tends to decline more than the broad market during the bear phase of the cycle and then bounces back more than the broad market in new bull markets. Although First Trust seeks to offer a fund that is more resilient to bear market declines, the fund may not in fact do that if it still has its heaviest weighting in the industrial sector when the next large decline comes. At the time of publication, Nusbaum had no positions in securities mentioned. Follow @randomroger This article is commentary by an independent contributor, separate from TheStreet’s regular news coverage.

This contributor reads: Credit Writedowns Pragmatic Capitalist Mike Shedlock Barry Ritholtz John Hussman On Twitter, this contributor follows: TheStalwart ETF Database zerohedge financial acrobat

10 Most Expensive Beers In The NFL

PORTLAND, Ore. (TheStreet) — Fans will forgive a National Football League team when it loses. They’ll roll with it when attendance sags and it doesn’t broadcast games on local television. They’ll even hang in there when it takes public money to build a stadium, despite the vast wealth of the team’s ownership.

Hike the price of beer, however, and you’ll give fans enough rage to keep them nice and toasty through the waning regular season games of winter.

The NFL fans who dislodge themselves occasionally from their cushy, screen-and-snack-filled game day caves, turn off DirecTV’s (DTV) NFL Sunday Ticket and actually attend games this year should prepare to get soaked on everything including the suds. The league’s average ticket price jumped 3.1%, to more than $81, according to Team Marketing Report. That’s the first time it’s drifted over the $80 mark, and nearly triple the cost of the average Major League Baseball ticket.

That isn’t exactly doing wonders for the argument the NFL is a family-friendly experience. The average cost to take a family of four to a game, park, have a beer, hot dog and soda and go home with a program and cap also jumped 3.7%, to nearly $460. If you’re a beer-swilling single, however, it’s not such a bad year. After beer prices that jumped from an average of 42 cents an ounce in 2011 to 43 cents an ounce last year, they actually sank to roughly 41 cents an ounce this year. That’s still $7 for little more than a pint, but it seems as if teams are making beer an actual concession to fans feeling otherwise squeezed by ticket prices. In Ohio, fans of the Cleveland Browns and Cincinnati Bengals still enjoy $5, 12-ounce beers for 42 cents an ounce. That’s still costly compared with the 35 cents per ounce paid by folks watching the Miami Dolphins (20 ounces for $7) and New Orleans Saints (24 ounces for $8.50). The Carolina Panthers have easily the lowest per-ounce price in the league at 27 cents per ounce (22 ounces for $6), but the biggest surprise may be in New England. Despite having the league’s highest average ticket price at $118 and making the AFC Conference Championship last year, the 38 cents per ounce the team charges for beer ($7.50 for 20 ounces) is the lowest of any team that made the playoffs last year. Other fans aren’t nearly as fortunate. With help from Team Marketing Report’s Fan Cost Index, we found the Top 10 beer prices in the league and the teams that view their fans as a keg of cash with a tap that’s always open:

10. Tie: St. Louis Rams/Buffalo Bills/San Francisco 49ers/Washington Redskins Price of a small draft beer: $9 for 20 ounces in St. Louis, D.C. and Buffalo; $6.25 for 14 ounces in San Francisco. Price per ounce: 45 cents

That’s a whole lot of nerve, Rams and Bills concessions folk.

We’d expect this from the 49ers, who just went to the Super Bowl, play in one of the most expensive cities in the country and are skipping town for fancy new digs in Santa Clara next year. We’d even expect it from Washington, which just had rookie quarterback Robert Griffin III lead the team to its first playoff appearance since 2007. But St. Louis? This town was built on beer, but that isn’t going to make fans more sympathetic when the team hasn’t made the playoffs since 2004, hasn’t had a winning record since 2003 and has had management demand that the city pay hundreds of millions of dollars for a new stadium. To top it off, the team jacked up the price of tickets 8.1% despite the fact that big-ticket franchise running back Stephen Jackson left for Atlanta. Also see: 5 Pro Sports Towns Doing Just Fine Without the NFL>> And Buffalo … seriously? Your starting quarterback is basically your last man standing, your front office just bilked the surrounding community out of $200 million to keep the team around for a scant eight years and you’re still playing a home game a year in Toronto. People were just overcoming their fear of Y2K the last time the Bills were in a playoff game Jan. 8, 2000, and the team has only managed one winning season since — in 2004. Your fans have to brave lake-effect snow and sub-freezing temperatures just to keep the team on local television late in the season and you charge them more for beer. If anything, that fan base deserves a round of Labatt’s on the house.

6. Green Bay Packers Price of a small draft beer: $7.50 for 16 ounces Price per ounce: 42 cents

No, they couldn’t catch a break on that botched call in Seattle or get past the 49ers in the playoffs to get Aaron Rodgers another ring, but at least the average cost of beer is down.

The 12 ounces of beer the pack sold for $6 last year looks cheaper on the surface, but that’s 50 cents an ounce. Fans at Lambeau Field are paying $1.50 more upfront, but a whopping eight cents less on the unit price. That’s not such a bad deal. Even if you’re still feeling ripped off, the best part of being a Packers fan is the team’s community ownership. If you’re a shareholder and hate the price you’re paying for what’s essentially the life’s blood of Wisconsin, make some noise about it.

5. Detroit Lions Price of a small draft beer: $9 for 20 ounces Price per ounce: 45 cents

Those prices aren’t from Team Marketing Report, but from Lions spokesman Ben Manges. TMR originally quoted a price of $8 for 12 ounces as Ford (F) Field’s cheapest beer. That’s 67 cents an ounce, which caught the attention of folks within the Lions organization.

While that’s what the team charges in the suites, Manges says 93% of the beers sold during Lions games go for the figure we listed above. The team sells an $8 at its stands, but in 16-ounce bottles. That’s 53 cents an ounce, but the Lions say that accounts for only about 6% of their beer sales. What all of this obscures is the fact that the Lions have raised their draft beer price 50 cents — or roughly three cents per ounce — from last season. That wouldn’t hurt nearly as badly if the team hadn’t gone 4-12 in 2012 just a year after making its first playoff appearance since 1999. Or if it wasn’t just the latest losing campaign for a team that’s only had winning seasons twice since 1997. They also haven’t won a playoff game since 1991, which was their only playoff win of the Super Bowl era. Its spokespeople can haggle over beer prices all they’d like: The fact is that a beer served at a Lions game at any price is only anesthetic for the pain this team continues to inflict on its fan base. Also see: 5 NFL Teams Most Likely To Be Blacked Out In 2013>>

4. Oakland Raiders Price of a small draft beer: $9.75 for 20 ounces Price per ounce: 49 cents

The Raiders have spent much of their time in Oakland losing and having home games blacked out on local television. Last year’s 4-12 team was considered a return to form after two straight 8-8 seasons and the false hope that accompanied them. Their home stadium — O.Co (OSTK) Coliseum — is the last in the country to host both a football and baseball team, is roundly despised by the latter and is so decrepit that the sewers back up into the locker room. The team is still considering whether it wants to stay in town or move to a place that will give it some stadium money. In the meantime, it’s making fans shell out $2.75 more for its smallest beer than it did a year ago, but reducing the cost by a scant 1 cent per ounce. If Terrelle Pryor doesn’t work some magic, it could be an exceptionally bleak year in the Black Hole.

3. Tie: Seattle Seahawks/Pittsburgh Steelers Price of a small draft beer: $8 for 16 ounces Price per ounce: 50 cents

The Seahawks gave the “12th Man” its own flag at CenturyLink (CTL) Field. Their fans registered on the Richter scale when running back Marshawn Lynch scored a touchdown in the playoffs three years ago and packs its home stadium. Even in its worst years, the Seahawk faithful generate crowd noise that reaches 140 decibels, or roughly as loud as one of Boeing’s jet engines. Yet somehow the emergence of rookie quarterback Russell Wilson and the team’s return to the playoffs have stirred up the ridiculous notion that Seattle should create more stadium parking just to accommodate all the bandwagons.

So maybe there were way more No. 3 Russell Wilson shirts at Bumbershoot this year than there were when Wilson was fighting for a job with Matt Flynn last year. The Mariners wish they had this problem with any of their players. The Seahawks haven’t been hurting for fan support in recent years, despite what local revisionist sports historians might tell you. That’s what makes it easy for the Seahawks to hold the line on beer prices despite the team’s changing fortunes. It was kind of the opposite situation in Pittsburgh, where a rash of injuries to stars Ben Roethlisberger and Troy Polomalu and some ugly losses to the Browns, Raiders, Titans and San Diego Chargers led the team to an 8-8 record. No playoffs, no bandwagon fans hoping for a Super Bowl ring: Just one of those down years in the Steel City and a long winter to follow. How do you raise beer prices on fans after a year like that? If you’re the Steelers, you don’t.

1. Dallas Cowboys Price of a small draft beer: $8.50 for 16 ounces in Dallas Price per ounce: 53 cents

NFL beer prices came down from last year’s highs of 55 to 58 cents per ounce. That left the Cowboys with the dubious distinction of serving the most expensive beer in the league despite not raising beer prices.

In owner Jerry Jones’s stadium wonderland of giant screens at midfield and dancing girls in the cages around the stadium, there is no public transportation to games whatsoever. That means you’re either taking a cab or paying $75 for parking, well over the $31 league average. Want a program? That’s $10, or more than double the league average of $4. Jones is aware that the Cowboys haven’t won a Super Bowl since 1995, though, have won one playoff game since 1997 and haven’t made the playoffs since 2009 and hasn’t raised a single price since last season. The team even gave AT&T (T) naming rights to Cowboys Stadium to generate more cash. The Cowboys tried to do right by the fans this season, but even holding the line on prices couldn’t keep Jones from wearing the league’s black hat. — Written by Jason Notte in Portland, Ore. >To contact the writer of this article, click here: Jason Notte. >To follow the writer on Twitter, go to http://twitter.com/notteham. >To submit a news tip, send an email to: tips@thestreet.com. RELATED STORIES: >>Not Your Typical Craft Beer Lover’s Getaway >>5 Pro Sports Towns Doing Just Fine Without the NFL >>5 NFL Teams Most Likely To Be Blacked Out In 2013

Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.