Facebook Inc.

Facebook Inc.

Facebook Inc. is one of the most popular social media sites and is one of the highest-grossing sites. FB sored almost 600% in five years, beginning July 2013. In 2018, it experienced a dip but later recovered. It has strong financial firepower against the total current liabilities and no long-term debt. The company experienced tremendous growth and, in the last years, garnered annual revenue at the rate of 46%. They have also managed to maintain a net profit margin of about 25%. Their ability to profitably grow revenue is a significant positive, especially for people looking to invest in Facebook. It is a stable company with substantial growth and reasonable valuation.

Twitter Inc. is a social networking service where users can interact and post tweets. It generates revenue from selling ads to businesses. The return on capital employed on Twitter is less than 4% but is an improvement since it did not have that before. The company built up some momentum in 2019, ending the year with a 21% increase in their active users. This growth is faster than that of its rival, Facebook. With its increasing popularity, the company has the potential to increase its user monetization in the next few years. Twitter’s stock could be a bargain today. However, it still has a growing number of miniature Data Acquisition Unit (MDA), which contribute to growth in the long run. The company may be facing challenges today, but it is in an excellent position to overcome them and be better. In the long term, Twitter is a substantial investment for investors..

Foot Locker Inc., like all my other investments, is a well-established brand. The company is an excellent choice for value investors. The company’s latest earnings estimates have been at best. FL has a strong balance sheet, which is vital to investors. It has a low price to earnings ratio of 8.4, which is lower than the US average of 18.7. However, a strong balance sheet implies growth and even more room for improvement. Investors have an opportunity to make money by buying and holding shares when low until the market is profitable to make money.

McDonald’s Corporation (MCD) is a global organization with over 36000 branches in over 100 countries. It has a market capitalization of about 145 billion dollars and a dividend yield of 2.7%. The company has managed to boost its payout annually for the last 42 years. Their stock has been performing well over the previous few, and their general performance is impressive. This year, the company is looking to incorporate innovative products such as an improved premium chicken sandwich. It is also improving its technical front by launching a digital customer engagement team to interact better with their consumers.

Costco Wholesale Corporation (COST) has seen steady growth over the years. The chain of business has seen huge investments come its way, even as it becomes one of the major players in the retail industry. One of the reasons for investing is the rise in sales. An increase in sales may not be the best measure of success but shows improvement in the company. The chain keeps growing, and many subscribers have been acquired. Its revenue has risen to 108% in the last ten years. The total memberships have increased from 58 million in 2010 to 99.9 million today. The gradual improvement in its market share encourages investors to invest in the ever-changing industry.

Research done

Before investing, it is essential to conduct research and understand what you’ll be getting yourself into. For my investments, I read the companies’ annual reports. The reports can be accessed through the websites of publicly traded companies. Reading an annual report is vital in understanding the value of a company. Their numbers help one know what is going on within the company. Understanding the concepts such as accounting goodwill, depreciation, and diluted shares outstanding will help one make better decisions. The area one focuses on are the company’s revenue, net income, earning per share capital, return on assets, and price per earnings ratio.

Another critical factor for successful stock-picking and investment methods is Value Investing. Some of the most useful tips for doing this come from Benjamin Graham. He outlines seven steps to successfully putting together a portfolio. The first factor to consider is the size of the company. A smaller company is subject to fluctuation in earning while a larger one enjoys more stability. One should also consider the financial position of the company. Graham recommends that their stock should have a ratio of at least two. The long term debt should not exceed working debt. Another consideration is earning stability for the company. Companies that have reported losses over the years show instability and should be avoided.

One should also understand their dividend record of common stock. This will provide some assurance that their future dividends will be paid. Graham’s next tip is to assess the earnings growth and profit of the company by ensuring that the company’s profit keeps pace with inflation. One should also consider a moderate price to earnings ratio. The current price of the stock should not be fifteen times more than its average earnings for the past three years. This protects one from overpaying for security. The final tip from Graham is to look out for the average ratio of price to assets. He advises that the current price should not exceed the book value by one and a half times.