Should You Still Consider Investing in Meta Platforms (FB)?

ClearBridge Investments, an investment management firm, published its “Large Cap Growth Strategy” third quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Large Cap Growth Strategy underperformed its Russell 1000 Growth Index benchmark during the third quarter. On an absolute basis, the Strategy had gains across four of the eight sectors in which it was invested (out of 11 sectors total). The leading contributors to performance were in the IT and health care sectors, while the consumer discretionary and industrials sectors were detractors. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

ClearBridge Large Cap Growth Strategy, in its Q3 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 a $922.9 billion market capitalization. FB delivered a -1.36% return since the beginning of the year, while its 12-month returns are up by 24.00%. The stock closed at $331.796 per share on January 07, 2022.

Here is what ClearBridge Large Cap Growth Strategy has to say about Meta Platforms, Inc. in its Q3 2021 investor letter:

“While and Facebook, the Strategy’s overweights in the mega cap group, underperformed both their FAAMG peers and the benchmark in the third quarter, we maintain conviction in these names because they have the highest growth profiles. Amazon is projected to grow earnings per share at 19% next year and Facebook at 13%, while Apple is expected to see only breakeven earnings in 2022 (Exhibit 1). Facebook remains at the center of regulatory attention, although we believe that the worst-case scenario options are low-probability events and that the digital advertising market continues to be quite healthy. In a similar way, we prefer to play the secular growth trends in digital advertising through Facebook rather than Google and the rollout of 5G via Qualcomm instead of Apple. Facebook has multiple products that can continue to drive attractive revenue growth including direct e-commerce solutions, payments, AR/VR and monetizing WhatsApp. In addition, the Federal Trade Commission’s dismissal of the government’s antitrust case against Facebook (even though the case was subsequently re-filed) supports our view that antitrust action against the company will be difficult to achieve.”

Photo by Austin Distel on Unsplash

Based on our calculations, Meta Platforms, Inc. (NASDAQ: FB) ranks 2nd in our list of the 30 Most Popular Stocks Among Hedge Funds. FB was in 244 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 0.53% 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 more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.

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