Allied International Trading: The world’s number 1 social networking company, Facebook, has delighted shareholders with an earnings report that comfortably beat analysts’ expectations.
Facebook unveiled figures showing $791 million in net income, against $333 million in the same quarter last year, a jump of 61%. The company said it earned 42 cents a share in the second quarter, easily beating expectations for 32 cents a share.
The company’s share price promptly surged 5% to $75.13 during after-hours trading.
“That share price puts a rough value of some $190 billion on Facebook which is more or less on a par with the likes of Big Blue, IBM,” said Bryce Cruickshank, head of equities research at Allied International Trading.
“The company’s fast-expanding mobile advertising business is proving itself to be extremely lucrative for the company and it must be particularly satisfying when just 18 months ago, everyone was saying that Facebook had to come up with a way to make money from mobile as more and more users gravitated towards smartphones and tablets,” added Cruickshank.
Allied International Trading said it doesn’t intend to change its view for the stock short term but advised clients without exposure to avoid acquiring it at current levels.
“Our outlook for Facebook remains largely positive but it is overpriced at current levels. In the fullness of time, it will warrant current prices but there is an awful lot of froth in the technology sector at the moment and, here at Allied International Trading, we’d prefer to see some of that come off before advising clients to get involved,” said Mr. Cruickshank.
About Allied International Trading:
Established in 2010, Allied International Trading manages diversified investment portfolios on behalf of institutional clients, corporate entities and sophisticated high net worth individuals.
The Allied International Trading investment process is meticulous in its attention to detail, due to our highly disciplined approach of identifying and valuing great businesses, with unrealized investment potential.
To ensure we stay ahead of the market, after careful deliberation by our analysts, we impose a strict limit on the amount of companies we expose our clients to, taking their personal risk tolerance into account. Our objective is to build a diversified investment portfolio that will deliver superior returns for our array of different investors.
For more information, visit: http://www.alliedinternationaltrading.com