Meta-investment | The Spokesperson’s Review

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The company formerly known as Facebook is now called Meta Platforms (Nasdaq: META), renamed to reflect its wide range of businesses. Along with the general market slowdown, its shares recently fell 55% year-over-year, presenting an attractive buying opportunity.

What’s going on? The growth rate of Meta has slowed down significantly lately. And it’s investing heavily in its Reality Labs segment, which offers augmented and virtual reality hardware, software, and consumer content — not yet very lucrative.

Meta Platforms itself, however, is highly profitable, with over $40 billion in cash, cash equivalents, and marketable securities on its balance sheet. Indeed, the social media juggernaut is a cash cow. Its trailing 12-month free cash flow (the cash remaining after taking into account operations and capital expenditures) recently stood at $35.8 billion.

Additionally, Meta’s Facebook, Instagram, Messenger and WhatsApp platforms are used monthly by approximately 3.6 billion people who share more than 140 billion messages daily. Meta stocks appear oversold and worth taking a closer look.

(The Motley Fool owns stock and recommended Meta Platforms. Randi Zuckerberg, former director of market development and Facebook spokesperson and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. .)

ask the fool

Q Are mutual funds like mutual funds? – PD, Winona, Minn.

A. Both are regulated and offer diversification through an assortment of stocks, bonds and other securities, but they also differ. At the end of each trading day, shares in the mutual fund are issued and redeemed on demand at a specified price (the “net asset value per share”) which reflects the total market value of the fund’s holdings divided by the number of actions. The number of shares is not fixed; if a lot of people want to buy, the fund company will issue more shares and have more money to invest.

Unit investment trusts, or UITs, on the other hand, have a fixed lifespan, beginning with a single public offering and ending on a specified date through liquidation. While mutual fund holdings often change a great deal over time, UITs have a relatively fixed portfolio of investments. Investors wishing to trade UIT shares do so in the secondary market, where share prices may be higher or lower than the net asset value of the trust’s holdings. Do your research before investing in an UIT.

Q Can you recommend any good books on how to spot bad corporate behavior in their financial reporting? – CF, Greensburg, Pennsylvania

A. Check out “Financial Shenanigans: How To Detect Accounting Gimmicks & Fraud in Financial Reports” by Howard M. Schilit and Jeremy Perler (McGraw-Hill, $40); “What’s behind the numbers? A Guide to Exposing Financial Quibbles and Avoiding Huge Losses in Your Portfolio” by John Del Vecchio and Tom Jacobs (McGraw-Hill, $36); or “Financial Intelligence: A Manager’s Guide To Know What the Numbers Really Mean” by Karen Berman and Joe Knight with John Case (Harvard Business Review Press, $35).

My smartest investment

My smartest investment has been in shares of Lockheed Martin. I bought my shares when they were at $87, and they’ve more than quadrupled in value since. – DM, online

The madman responds: They’ve actually almost quintupled in value at this point – congratulations!

Despite an ongoing war in Ukraine, this major defense contractor hasn’t been firing on all cylinders lately. Lockheed Martin’s latest earnings report was disappointing, with revenue down more than 9% year-on-year, while operating profit fell more than 10%. Partly due to a large pension settlement, net income fell 83%. On the positive side, free cash flow improved 8% year over year, with the company reporting cash from operations of $1.3 billion.

Still, there are plenty of reasons to be optimistic about Lockheed Martin’s future. CEO James Taiclet said: “While revenue in the period was impacted by supply chain impacts and the timing of customer contract negotiations, our cost management initiatives resulted in increased profit margin). Additionally, our strong cash generation also continues to provide the resources needed to invest in building the foundations for future revenue and margin growth opportunities.

Meanwhile, the company also has three contracts with NASA for work related to Mars missions, and it raked in nearly $12 billion last year for space work. You’re sitting on a big win – dig deeper into the business to see if you expect further growth to come.

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