Facebook (FB) at $130 is trading at a very attractive entry point at 17 Times Forward Earnings.
FB is valued at ~$360B excluding excess cash which is a very attractive price for a dominant company in its industry of Social Networking and Advertising. FB has strong products including FaceBook, Instagram, Whatsapp, Messenger. Instagram and Whatsapp will be monetized over the coming years. FB also has 19% market share in the fast growing online advertising space with GOOGL having 37% share and AMZN catching up with 5% market share.
Even assuming reduced margins going forward for FB due to increased spending for security and impact of regulations for a company that can grow revenue and earnings 20%+ for next 5+ years $130 and $360B excluding cash is an attractive price. Any additional innovation by FB can add additional upside. Projected FB target price 3 to 5 years out from Oct 2018 is $250 to $350.
Wednesday, November 21, 2018
BAM to Take Advantage of Dip in BPY To Increase Ownership
Shares of Brookfield Property Partners LP (BPY) have been weak to concerns about a soft 3Q2018 and investors shying away due to concerns about the high leverage, extermal management, rising interest rates and pessimism about propects for the Retail (GGP) portion of the business.
Brookfield Asset Management (BAM) is likely to take advantage of this dip in BPY and could increase its ownership stake in BPY from 53% to 60% or more over the course of next few months.
It is yet to be seen if BAM 's plan for re positioning and redevelopment of GGP assets will be successful or not. There is also some risk in terms of whether BAM and BPY can sell select GGP assets at good valuation over next 12 to 24 months to deleverage the balance sheet as planned.
BAM will need to execute flawlessly over next year to strengthen BPY balance sheet. Brexit related pessimism (BPY has significant UK assets including 50% ownership in Canary Wharf and assets in Central London) and fear of rising interest rates and BPY having 37% of debt exposed to variable rate mortgages are a factor to consider.
Time will tell but odds are in favor of BAM succeeding in its plans for BPY and realizing unit price of $30 over next 3 years.
Brookfield Asset Management (BAM) is likely to take advantage of this dip in BPY and could increase its ownership stake in BPY from 53% to 60% or more over the course of next few months.
It is yet to be seen if BAM 's plan for re positioning and redevelopment of GGP assets will be successful or not. There is also some risk in terms of whether BAM and BPY can sell select GGP assets at good valuation over next 12 to 24 months to deleverage the balance sheet as planned.
BAM will need to execute flawlessly over next year to strengthen BPY balance sheet. Brexit related pessimism (BPY has significant UK assets including 50% ownership in Canary Wharf and assets in Central London) and fear of rising interest rates and BPY having 37% of debt exposed to variable rate mortgages are a factor to consider.
Time will tell but odds are in favor of BAM succeeding in its plans for BPY and realizing unit price of $30 over next 3 years.
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