Post YELP, TWTR and FB earnings, the sector is being marked for dead. All of the people who make believe they know something about stocks are announcing victory over social media–insisting that the bubble has popped and anyone long is a headlong idiot.
These people are betting against the internet.
At any rate, I’m not a fan of buying high growth at any cost. For example, TWTR, BABA and FB are all trading above 20x sales. I have zero interest. I own FB from $32, so I will not sell it here. But, on the other hand, I am certainly not buying it after this minor pullback.
All jokes aside, this is the premier part of the tech sector, the area with the highest growth. So when will some of these stocks become buys, and which ones are worth targeting?
My favorites are YELP, TRIP and Z. But let’s have a look at the sector, revenue growth, p/s ratios and YTD returns to get a clear view of what we’re looking at.
(Stock, Rev Growth, p/s ratio, YTD return)
TWTR, +124%, 30x, -32%
BABA, +46%, 26x,
FB, +60%, 21x, +39%
Z, +68%, 17x, +29%
WB, +105%, 14x
LNKD +47%, 13x, -7%
GRUB +74%, 13x
YELP +67%, 12x, -16%
TRIP +31%, 11x, +5.5%
CTRP +38%, 7x, +14%
Clearly, as you can see, this is hardly a sector on fire. It’s been under fire all year long and valuations are coming in fast. With share prices lagging and growth still soaring, many of these names are setting up for big runs in 2015.
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FB and BABA only good ones to own. the rest are xtremly overvalued
I am recently turned off by yelp – it’s ruled by those so called Elite Yelpers. They form a network of buddy system to stay Elite, and their reviews appears on top and influence the sorting order. I’ve seen some Elite Yelpers yelping out tons of garbage reviews to get their numbers up. This has to change.
You forgot something important. Earnings. At least FB and BABA have earnings not sure if YELP will ever have them. Takeover target if they go lower.
YELP has a massive H/S top on 2 year chart
“The Internet? Is that thing still around?”
— Homer Simpson
Is it time fer me ta put on me dance shoes and git ready for the Romanian dance?
Fb is dying. People are starting to realize they aren’t famous because 500 people see their thought
More to the point though they aren’t needing as high% of their 24hrs for it. Lot less postpercapita