Is Facebook a Healthy Stock for Your Portfolio?

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With shares of Facebook (NASDAQ:FB) trading around $69, is FB an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Facebook is engaged in building social products in order to create utility for users, developers, and advertisers. People use Facebook to stay connected with their friends and family to discover what is going on in the world around them, and to share and express what matters to them with the people they care about. Developers can use the Facebook platform to build applications and websites that integrate with Facebook to reach its global network of users, building personalized and social products. Advertisers can engage with more than 900 million monthly active users on Facebook — or subsets of its users — based on information they have chosen to share.

Facebook’s recent acquisition of WhatsApp is prompting privacy probes throughout the European Union. A top privacy regulator for the EU claims watchdogs want to keep an eye on the mobile messaging service and Facebook. It’s this large acquisition that sparked serious interest in WhatsApp from the authorities. Bloomberg News added, “The proposed cash-and-stock acquisition would be the biggest by Facebook, the world’s largest social network, and gives WhatsApp roughly the same valuation as Gap Inc. and more than half the market value of microblogging service Twitter (NYSE:TWTR). WhatsApp lets users send messages through its service on mobile devices based on different operating systems including Apple (NASDAQ:AAPL)’s iOS, Google (NASDAQ:GOOG)’s Android, Microsoft Corporation (NASDAQ:MSFT)’s Windows Phone and BlackBerry Ltd (NASDAQ:BBRY)’s software.”

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