Facebook May Be Down, but It's Not Out
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"You have long, short fund and Facebook is part of your long strategy. Boy, this is a stock that really just can't get its mojo back."

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SOUNDBITE: RHONDA SCHAFFLER, REUTERS REPORTER, (ENGLISH) SAYING: "You have long, short fund and Facebook is part of your long strategy. Boy, this is a stock that really just can't get its mojo back." SOUNDBITE: CHRISTOPHER BAGGINI, SENIOR PORTFOLIO MANAGER, TURNER INVESTMENTS (ENGLISH) SAYING: "Yeah, it's down year-to-date. It's one of the reasons why we like it. It's down pretty strongly actually down 8 percent, market is u, double-digits year-to-date, and it's a company that executed actually pretty well the last couple of quarters. In fact, the last three quarters, they've beaten earnings expectations. EBITDA is moving up into the right and it's really because of the revenues. The revenues of the mobile business have been growing much faster than expected. They've transitioned from being only a desktop play to being a hybrid with desktop and mobile advertising leading the way. Their usage on their website has continued to be very strong. It's a very unique asset." SOUNDBITE: RHONDA SCHAFFLER, REUTERS REPORTER, (ENGLISH) SAYING (OFF CAMERA): "So is the market just ignoring all of that? And do you think it's a stock they like to beat up on?" SOUNDBITE: CHRISTOPHER BAGGINI, SENIOR PORTFOLIO MANAGER, TURNER INVESTMENTS (ENGLISH) SAYING: "It's a battleground stock. So there are a whole cadre of bears who would say that the younger user is not engaged anymore and it's eventually MySpace which went away several years ago. My view however and the firm's view is that Facebook has a unique property. The usage of the website is not trailing off, and in fact, it was up month over month again last month, and continues to move up into the right. And part of it is because their mobile platform continues to do very well. When you look at the amount of people who are signing on using Facebook on a mobile device or a tablet device, you're looking at 12, 15 times the next highest competitor. It's all organic. So you don't have to go through Google, you go right to Facebook and they're not paying for that traffic. Now they're under-monetizing so far based on the usage trends. Again, it's a very unique proposition in that their usage is so much higher than everybody else. But as that starts to come out over time as they bring out video feeds into the advertising network, we think that their CPM is going to be moving much higher." SOUNDBITE: RHONDA SCHAFFLER, REUTERS REPORTER, (ENGLISH) SAYING (OFF CAMERA): And the stock price will? SOUNDBITE: CHRISTOPHER BAGGINI, SENIOR PORTFOLIO MANAGER, TURNER INVESTMENTS (ENGLISH) SAYING: "And the stock price will move with that. Once they can distance themselves away from being the next MySpace, many people will realize that it's not expensive for the high growth that we're getting. We're getting 11 times next year's EV to EBITDA which is very inexpensive. Amazon who's growing actually slower top-line is trading about 19 times, and media companies overall are trading between 8 and 10 times revenues or 8 to 10 times EV to EBITDA while Facebook is growing much faster."