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Do You Think Meta Platforms (META) can Retain the Pandemic-Induced Growth?

Wedgewood Partners, an investment management company, released its “Large Cap Focused Growth Fund” third-quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund returned -4.1% net, compared to a -4.9% return for the Standard & Poor's Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Wedgewood Partners discussed stocks like Meta Platforms, Inc. (NASDAQ:META) in the Q3 2022 investor letter. Meta Platforms, Inc. (NASDAQ:META) is a technology conglomerate headquartered in Menlo Park, California. On October 13, 2022, Meta Platforms, Inc. (NASDAQ:META) stock closed at $130.29 per share. One-month return of Meta Platforms, Inc. (NASDAQ:META) was -12.88% and its shares lost 60.34% of their value over the last 52 weeks. Meta Platforms, Inc. (NASDAQ:META) has a market capitalization of $350.161 billion.

Here is what Wedgewood Partners specifically said about Meta Platforms, Inc. (NASDAQ:META) in its Q3 2022 investor letter:

"Meta Platforms, Inc. (NASDAQ:META) detracted from performance during the quarter. Meta’s advertising revenue grew +3% (currency-adjusted) over 2021 and is up +70% since 2019 (pre-pandemic). The shift of advertisers and consumers to social media has been fairly dramatic and sticky. The Company reported $2.88 billion “daily active people” of its Family of Apps (as of June 2022) and is +35% higher than the comparable month pre-COVID (June 2019). Meta also serves over 10 million advertisers which is up from 8 million in January 2020. In spite of these impressive gains, the stock now trades at absolute levels well below where it traded before the pandemic. We suspect much of the market’s concern revolves around slowing revenue growth. It is fairly evident that there was a tremendous pull-forward of demand for many businesses and services over the past couple of years, and that the normalization of revenue growth from that “pull-forward” is hardly an existential crisis. Further, while Meta’s profit margins have fallen below pre-pandemic levels, it’s important to note that the Company likely hired well in excess of what it needed because it assumed the pandemic induced growth would continue. Meta has plenty of room to moderate its expense base and drive significant value by repurchasing shares at today’s historically depressed multiples."


Photo by Alexander Shatov on Unsplash

Meta Platforms, Inc. (NASDAQ:META) is in 4th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 184 hedge fund portfolios held Meta Platforms, Inc. (NASDAQ:META) at the end of the second quarter which was 200 in the previous quarter.

We discussed Meta Platforms, Inc. (NASDAQ:META) in another article and shared stock picks of Sander Gerber’s Hudson Bay Capital. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.


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