Should You Add Meta Platforms (META) to Your Watchlist? - InvestingChannel

Should You Add Meta Platforms (META) to Your Watchlist?

Giverny Capital, an investment management company, recently published its fourth-quarter investor letter in 2022. A copy of the same can be downloaded here. The model portfolio of the firm appreciated 8.49%, net of fees in the fourth quarter compared to a 7.56% return for the Standard & Poor’s 500 Index. For 2022, the fund delivered a -22.65% return compared to a -18.11% return for the Index. Oil and energy was the strongest sector in the year increased by 65%. In addition, you can check the top 5 holdings of the fund to see its best picks for 2022.

Giverny Capital highlighted stocks like Meta Platforms, Inc. (NASDAQ:META) in the Q4 2022 investor letter. Headquartered in Menlo Park, California, Meta Platforms, Inc. (NASDAQ:META) is a technology company that develops products to connect people. On January 26, 2023, Meta Platforms, Inc. (NASDAQ:META) stock closed at $147.30 per share. One-month return of Meta Platforms, Inc. (NASDAQ:META) was 22.40%, and its shares lost 51.18% of their value over the last 52 weeks. Meta Platforms, Inc. (NASDAQ:META) has a market capitalization of $386.25 million.

Giverny Capital made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q4 2022 investor letter:

“Even if sector weightings explain most of our underperformance, I made some dubious decisions during the year. Most notably, I added to our holding in Meta Platforms, Inc. (NASDAQ:META), which declined 64% for the year. Meta began the year as a 4.3% weighting and ended as a 2.5% weighting, despite our incremental purchases.

I got plenty wrong about Meta, including the magnitude of the impact that Apple’s changes to privacy tracking would have on Meta’s value to advertisers. Meta’s two giant social media platforms, Facebook and Instagram, arguably may be weaker businesses than they were a year ago, thanks to Apple and the rising popularity of TikTok. Nevertheless, Meta remains an enormously profitable enterprise, with firehose levels of cash flow. It may be squandering some of that cash flow trying to develop the metaverse, but expense control problems are easier to address than a lack of cash flow. Belatedly, CEO Mark Zuckerberg seems to have recognized the need to match expense growth a little more closely to revenue growth. I never want to see anyone lose their job, but Meta hired many thousands of people to support growth that may not materialize. When Meta announced layoffs late in 2022, the stock began to recover.

To repeat what I wrote to you last quarter, aside from Meta, I don’t see any of our bottom five performers losing market share or competitive position.”

Pixabay/Public Domain

Meta Platforms, Inc. (NASDAQ:META) is in 4th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 177 hedge fund portfolios held Meta Platforms, Inc. (NASDAQ:META) at the end of the third quarter, which was 185 in the previous quarter.

We discussed Meta Platforms, Inc. (NASDAQ:META) in another article and shared the list of cheap blue chip stocks to buy. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.

 

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

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