A Lot of Investors Are Still Shorting Facebook, Inc. (FB)

How do you judge Wall Street’s opinion of FB stock? You could look at price, sure. But that doesn’t tell the whole story. Short sellers are betting against Facebook, Inc. (NASDAQ:FB) during the most recent two-week period. Looking at the sentiment indicator for the FB stock we see that the short-interest ratio is at 1 while the average analyst recommendations at 2.1 suggests buying these shares. Between December 14 and December 31, the total number of shorted shares amounted to 34.46 million shares. That was 11% more than the total of 31.05 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go down. Average daily volume for Facebook, Inc. at the December 31st settlement jumped to 34,488,185, as compared to 23,871,611 at the December 14th report. That brought days to cover 23.11% down from the 1.300591 days to cover recorded at the prior short interest data release.

Facebook, Inc. (FB) will probably climb 30.02 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $275-month high price target. This represents a whopping 91.24 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $190, which represents a return potential of 32.13 percent when compared to the closing price of the stock of $143.8 on Friday, January 11. The lowest price target for the stock is $113 — slightly more than -21.42 percent from FB’s current share price.

The stock is currently hovering around the first support level of $142.46. Below this, the next support is placed in the zone of $141.12. Till the time, the FB stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 56.69 on daily chart, which may remain a cause for concern. If the price breaks below $141.12 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $145.25 mark may result into a pull-back move towards $146.7 level.

On 11th of January, Facebook, Inc. (NASDAQ:FB) shares ended lower after a volatile session. The shares dropped -0.4 points or -0.28 percent at $143.8 with a light trade volume of 12.778 million shares. After opening the session at $143.15, the shares went as high as $145.36 and as low as $142.57, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $414 billion and now has 2.88 billion shares outstanding. Facebook, Inc. (FB) stock has gained 1.21 percent of market value in 21 trading days.

FB stock has a trailing 3-year beta of 0.73, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $7.41 a share in the trailing twelve months. The stock’s value has surged 9.7 percent year to date (YTD) against a decline of -23.45 percent in 12 month’s time. The company’s shares still trade -34.22 percent away from its 1-year high of $218.62 and 16.89 percent up from 52-week low of $123.02. The average consensus rating on the company is 2.1, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Facebook, Inc. (FB) are trading at a P/E ratio of 18.22 times earnings reported for the past 12 months. The industry FB operates in has an average P/E of 25.67. Its P/E ratio went as low as 28.65X and as high as 91.7 over the 5-year span. Further, it is sporting a 7.99 on the Price-to-Sales ratio. Compare this with the industry average P/S of 5.62. 84.3 percent is the gross profit margin for Facebook, Inc. and operating margin sits at 47.1 percent. Along with this, the net profit margin is 37.6 percent.

Let’s take a look at some insider activity at Facebook, Inc. (NASDAQ:FB) and see the pattern. The earliest insider trade took place on 01/08/2019. Sandberg Sheryl parted with a total of 55 thousand shares of company at average share price of $141.66. The total for the sales was set at $7.79 million. After this transaction, the COO account balance stood at 1.24 million shares. The stock grew 1.51 percent since that insider sale. On 12/27/2018, Sandberg Sheryl, COO, sold 55 thousand shares at a price per share of $132.11. This removed 7.27 million shares from the insider’s fortune and the stock saw a 8.85 percent rally in value since the news became public. This transaction left 1.24 million shares in the COO account.

On 12/10/2018, Chief Accounting Officer Taylor Susan J.S. performed a sale transaction worth $294.84 thousand. This sale at $139.6 each has eliminated 2.11 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 3.01 percent increase since the transaction was reported. The insider now is left with 0 thousand shares remaining in the account. Sandberg Sheryl, who performs the COO job, sold 55 thousand shares for $7.75 million. The disposal occurred on 12/10/2018 was priced at $140.94 per share. The share price soared 2.03 percent since the reporting date. Sandberg Sheryl now left with a stake of 1.24 million FB stock worth $177.62 million after the insider selling.