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Is Meta Platforms (FB) A Smart Long-Term Buy?

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Wedgewood Partners, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. For calendar 2021, a portfolio net return of +32.1% was recorded by the fund, outperforming the S&P 500 Index that delivered a +28.7% return for the same period, and the +27.6% gain of the Russell 1000 Growth Index. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Wedgewood Partners, in its Q4 2021 investor letter, mentioned Meta Platforms, Inc. (NASDAQ: FB) and discussed its stance on the firm. Meta Platforms, Inc. is a Menlo Park, California-based multinational technology conglomerate holding company with an $889 billion market capitalization. FB delivered a -4.98% return since the beginning of the year, while its 12-month returns are up by 19.48%. The stock closed at $319.59 per share on January 19, 2022.

Here is what Wedgewood Partners has to say about Meta Platforms, Inc. in its Q4 2021 investor letter:

"Meta Platforms, formerly known as Facebook, detracted from performance. Meta’s core Facebook properties reported an impressive +35% revenue growth, an acceleration over last year’s +22% revenue growth, as small businesses continued to flock to the Company’s advertising platform. However, the Company’s forward-looking guidance came in below what many investors were expecting because changes to Apple’s mobile operating system (iOS) privacy policies made it more difficult for advertisers and Facebook to track the performance of ad spend. Facebook has anticipated Apple’s changes for some time; however the rollout of alternative performance tracking will take time for advertisers to implement. Longer-term, we think Facebook’s core properties represent a compelling value proposition for most small advertisers because the Company has billions of daily users that flock to it. Although Meta’s spending on noncore projects related to what it defines as the “metaverse” has driven expense growth higher, we consider it not too out of line compared to the spending of most large technology companies that often just refer to it as “research and development.” Meta trades at an attractive multiple and with an unmatched competitive positioning in social media advertising, so we added to our position during the quarter."


Photo by Timothy Hales Bennett on Unsplash

Our calculations show that Meta Platforms, Inc. (NASDAQ: FB) ranks 2nd on our list of the 30 Most Popular Stocks Among Hedge Funds. FB was in 248 hedge fund portfolios at the end of the third quarter of 2021, compared to 266 funds in the previous quarter. Meta Platforms, Inc. (NASDAQ: FB) delivered a -6.22% return in the past 3 months.

In December 2021, we also shared another hedge fund’s views on FB in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.