The Zacks Analyst Blog Highlights: Facebook, Google, Ford Motor, Fox Factory Holding and Tata Motors
For Immediate Release
Chicago, IL – May 29, 2014 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Facebook (FB-Free Report), Google (GOOGL-Free Report), Ford Motor Co. (F-Free Report), Fox Factory Holding Corp. (FOXF-Free Report) and Tata Motors Ltd. (TTM-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday’s Analyst Blog:
Facebook Cuts Down on Auto-Shares
Recently, Facebook (FB-Free Report) announced that it would cut down on Newsfeed updates that third-party apps including the likes of Spotify and Cityville automatically share. This step has been initiated by Facebook in response to more and more users marking these automatic shares as spam.
Facebook believes that posts people create and share are circulated more compared to auto-share updates. While auto-shares will still exist on its platform, they will no longer appear as frequently in Newsfeed as they appear currently.
However, Facebook provided a handful of alternatives for making these third-party apps appear on feed including the likes of the “send to mobile” feature.
Moreover, Facebook is set to include the "Like" button on mobile apps, which in turn will enable users to share content from their apps with a single tap only. Currently, this feature is available to iOS users only with a wider rollout of the same expected soon.
Per Gartner, mobile advertising spending is forecast to reach $18.0 billion in 2014 and the market is expected to grow to $41.9 billion by 2017. This presents significant growth opportunity for Facebook due to its expanding mobile-based product portfolio.
Mobile share in Facebook ad revenues increased from a paltry 11.0% in 2012 to 45.1% in 2013. Per eMarketer, this figure is expected to rise to 63.4% of net ad revenue in 2014. We believe that by cutting down on unwanted automatic shares, Facebook will be able to enhance user engagement, which in turn will help in attracting advertisers thereby boosting revenues.
As Facebook’s ad business matures, top-line growth is expected to suffer. Facebook’s rapid pace of acquisition is also expected to weigh down on profitability and cash balance in the near term. Intensifying competition from the likes of Google (GOOGL-Free Report) remains a major concern.
However, we believe that Facebook’s growing mobile user base, Instagram’s increasing popularity, the frequent launching of new products and international expansions will boost the company’s top line and profitability going forward.
Currently, Facebook has a Zacks Rank #2 (Buy).
Ford Completes First Chinese ABS Transaction
Ford Automotive Finance (China), the Chinese subsidiary of Ford Motor Credit Company, a part of Ford Motor Co. (F-Free Report), announced that it has completed the first asset-backed securitization (ABS.V) in the country. This ABS will assist in financing the company’s vehicle sales in the nation.
Ford Automotive Finance (China) is the first wholly foreign-owned auto finance company to complete such a transaction in China. This transaction, which is valued at 800 million renminbi, was completed under the recent ABS pilot program governed by the China Banking Regulatory Commission and the People’s Bank of China.
Ford will benefit from this transaction, as it will increase the automaker's penetration in the China’s capital markets, and thus help in the growth of its One Ford plan. In addition, this will support Ford’s strategy of diversified financing and local funding of business.
Ford Automotive Finance (China) is now focused on increasing its dealers and retail customers in the nation. The unit will also support the launch of the Lincoln brand in China. The ABS will further support the financing requirements of Ford in the nation.
Ford Automotive Finance (China) has been in operation since 2005. It offers wholesale financing for about 400 dealers and retail financing through 500 Ford dealerships in 290 cities across China. Its parent company Ford Credit is an experienced issuer of ABS with public and private programs in the U.S., Europe, Canada, Mexico and China. It has been securitizing assets since 1989
Ford currently carries a Zacks Rank #3 (Hold). Fox Factory Holding Corp. (FOXF-Free Report), Tata Motors Ltd. (TTM-Free Report) are two better-ranked automobile stocks worth considering; both carry a Zacks Rank #1 (Strong Buy).
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