New Trade: Long Facebook (FB) & Short Adobe (ADBE)

By: ispeculatornew
Date posted: 06.09.2014 (3:00 am) | Write a Comment  (0 Comments)

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Last week was a fairly quiet one but the overall return of my portfolio is now up to 19.40% (before fees) and the average trade has returned 9.05%. I’m obviously happy with the results so far.

I discuss these type of things as well as give my thoughts on the tech stocks in my free email newsletter, feel free to join here:

You can also see my live trades here:

http://www.intelligentspeculator.net/livetrades

As I’ve mentioned many times, this is a return gross of fees. The main fees involved are the borrow costs (net of interest on cash) and can be up to 1-2% on average per year.

Back to today’s business though. I decided to go back to shorting Adobe (ADBE) at the same time as I’m closing my previous one on the company.

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
ADBEAdobe Systems Inc66.91112.3532.4911.46-7.913.8913.260.948.095.25-8.22
FBFacebook Inc62.583.9334.4715.1854.694.636.530.683.25N/AN/A

ADBE Revenue (Quarterly YoY Growth) Chart

ADBE Revenue (Quarterly YoY Growth) data by YCharts

$FBLong Facebook (FB)

It’s no secret that I’m a big believer in Facebook and have been for some time. It’s actually my biggest single name holding, mostly because it has risen so much from the purchase point. I do think the stock is well on its way to recover after falling significantly like most other internet related stocks. At this point, I do think there is still a lot of growth ahead for Facebook and while it’s not as cheap as it was a year ago, FB is certainly a no-brainer when trading at a comparable valuation to ADBE.

ycharts_chart (1)

Next earnings release: July 24th 2014

Short Adobe (ADBE)

Adobe is one of those companies that is trying to adapt to a cloud-based world and is struggling in many ways to get it done. I do think they’ve done some things right but overall, it’s not a very encouraging story and it certainly does not warrant its current valuation making it a fairly straightforward stock to short.

ycharts_chart

Next earnings release: June 17th 2014

Disclaimer: Long Facebook (FB)

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