Facebook’s Hot, But Valuation’s Questionable

By  for Profit Confidential

Facebook’s HotI’m not sure if you’ve noticed, but Facebook, Inc. (NASDAQ/FB) is steadily edging higher on its chart and just flew above the $30.00 level last Wednesday, with nearly 105 million shares traded, the highest daily volume since November 16, 2012. There is clearly some market interest returning to Facebook since the stock plummeted to $17.55 on September 4, 2012. The stock price is still far away from its $45.00 high on its May 18, 2012 initial public offering (IPO) day, but the upward momentum and volume make Facebook an intriguing stock at this time, based on my stock analysis.

Driving up the current buying is news that Facebook is set to launch another new product or service this week that will likely include new services to generate much-needed revenue growth. The company has launched its mobile advertising model that could drive profits, according to my stock analysis.

What Facebook has in its favor is its massive user base of a billion subscribers. This is significant, and if the company can monetize this asset, my stock analysis suggests that the stock could continue to drive higher. The Safest Way To Leverage The Coming Gold Mania

The stock chart below shows the nice, steady rally in Facebook since the stock broke above its 50-day moving average (MA) in mid-November 2012, with higher highs and lower lows. Based on my technical analysis, we may be witnessing a bullish cup-and-handle formation.

FB Facebook, Nasdaq stock market chart

Chart courtesy of www.StockCharts.com

Whether you blog, tweet, or meet face-to-face in the virtual world via Skype, Facetime, or Facebook, social networking offers vast opportunities, especially in China, as my stock analysis suggests. (Read “Why China’s Internet Sector Is Lucrative.”)

While I was not too keen on Facebook in the past, based on my stock analysis, I’m beginning to sense something big could happen as far as the company’s vast potential.

Again, Facebook has one billion subscribers to make money from.

My sto… Read More