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Here’s What to ‘Like’ About Facebook Stock

By U.S. News & World Report

Like few other tech companies in the world — Alphabet (ticker: GOOG) comes to mind — Facebook has taken off like a rocket soaring into cyberspace.

Facebook (FB) stock appears strong enough to withstand any interest rate hike or token competition from the struggling Twitter (TWTR). Let’s put it in 140 characters or less: TWTR stock is down more than 50 percent since April.

Contrast that to Facebook, which trades at about $105 a share — marking an increase of more than 40 percent from this time last year. Considering the anemic performance after its 2012 initial public offering, the recent performance of Facebook stock — and the smart acquisitions that undergird it — bode well for those who add a piece of FB stock to their portfolio in the new year.

“Three-and-a-half years after the IPO and 11 years after launch the results have been nothing short of impressive,” says Peter Frawley, financial consultant and senior vice president of CoreCap Investments in Southfield, Michigan. “The management isn’t sitting on their laurels watching cats ride around on Roombas.”

And in a world where a web portal’s advertising value is measured by the number of eyeballs it attracts, Facebook simply can’t be beat. As of September, it tallied 1.55 billion monthly active users.

“Facebook’s user base is five times that of Twitter’s and Facebook is aggressively innovating its product portfolio to monetize it,” says Todd Antonelli, managing director of the Berkeley Research Group in Chicago.

With its third-quarter 2015 earnings report, Facebook beat Wall Street expectations, posting earnings of 57 cents a share (beating analysts’ expectations for 52 cents) on $4.5 billion in revenue. “The valuation is moving closer to $300 billion in less than four years of public trading,” Frawley says. “Facebook has deep and broad penetration in the mobile space and has proven the ability to monetize the social media experience.”

What many investors know, but many Facebook users don’t, is that key acquisitions have proved worthy of investors hitting the “like” button countless times. These include WhatsApp (a mobile messaging app), Oculus (which pioneered a virtual reality headset) and the ever-popular Instagram.

Facebook took a gamble when it paid $1 billion for the photo-sharing app service in 2012. But by itself, Instagram now has more than 400 million monthly users — an amount that surpasses Twitter’s tally of roughly 320 million users per month.

“Facebook has been demonstrating steady leadership, vision and execution,” says James Gellert, CEO of Rapid Ratings International in New York. “All social media companies are striving for advertising revenue, mobile users and greater and greater innovation. And with Instagram beating out Twitter, Facebook has made a solid acquisition in terms of diversifying its user base and broadening the corporate reach.”

That could prove crucial in the years ahead. As post-millennials ignore Facebook — often seen as the social media hangout parents and baby boomers hijacked — they have flocked to Instagram. By analogy, it’s akin to dissing McDonald’s Corp. (MCD) for Chipotle Mexican Grill (CMG) a decade ago. The burger giant once owned 90 percent of the Mexican food chain before selling off its stake in 2005.

Still, it’s not time for Facebook investors to launch a cyber-party just yet. Issues with valuation present some yellow flags, even for the stock’s enthusiasts.

Compared to its current stock price, Facebook’s price-to-earnings ratio is a sky-high 105. “The Standard & Poor’s 500 index averages around 16 and is currently [near 22], so for Facebook’s stock price to be equivalent to the index ratio it would need roughly a 500 percent increase in revenue,” Frawley says. “That is unrealistic and reminiscent of the late ’90s tech bubble.”

The stock could be especially hurt if interest rate hikes slow the economy, but arguably that could put a ding in tech stocks of every stripe.

So call it bullishness or foolishness, but many predict that Facebook’s steady stock price climb will show no signs of stalling in 2016. Many observers believe the Oculus Rift virtual headset will prove a game-changer, giving the social media company a lofty stake in tech product realm. In fact, Oculus represents “a crown jewel” in Facebook’s stable of franchises, says Max Wolff, chief economist for Manhattan Venture Partners in New York.

Though the Oculus Rift headset missed the 2015 holiday shopping season, its targeted launch date is early 2016. And with no new iPhone release or other must-have gadgets on the horizon, the Rift could prove to be that revolutionary tech device that launches Facebook earnings into the stratosphere.

“Facebook is beloved,” Wolff says. “Too many years of outsized returns and taking outsized risk have created nosebleed valuations across tech land. But Facebook will do very well for the next 12 to 18 months.”

So no matter its page view rank, “Facebook is on top of the investment world,” Wolff says, “and Wall Street loves Facebook.”

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Here’s What to ‘Like’ About Facebook Stock originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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