Editor's Note: This content was originally published on
by Nelson Hem.
Among the social media companies based in the United States,
) saw significant upswings in short interest between the September
13 and September 30 settlement dates.
The number of shares sold short in
(YELP) also increased in that time.
(SFLY) bucked the trend, with declining short interest in the first
two weeks of the month.
In addition, note that the number of US-listed shares (or ADRs)
sold short of Chinese social media companies
(SINA) shrank in late September, while those in
Below our firm takes a quick look at how Facebook, Google, and
Zynga have fared and what analysts expect from them.
The number of shares sold short in this social networking giant
jumped about 48% to near 40.01 million, the highest level of short
interest so far this year. That was on top of a 15% rise in short
interest in the previous period, and it represents more than 2% of
the total float.
Facebook is expected to post annual revenue growth of more than 30%
both this year and next. The company has a market capitalization of
almost $114 billion. While its long-term earnings per share (EPS)
growth forecast is about 30%, the price-to-earnings (P/E) ratio
remains in the stratosphere.
Of the 40 analysts who follow the stock and were surveyed by
Thomson/First Call, 13 rate the stock at Strong Buy, and 16 others
also recommend buying shares. The mean price target, or where
analysts expect the share price to go, is more than 8% higher than
the current share price.
The share price has retreated more than 7% in the past week, but it
is still about 67% higher year-to-date. Over the past six months,
the stock has outperformed the likes of
(AOL), Google, and
Short interest in this Mountain View, California-based operator of
Google+ and YouTube rose more than 23% in the period to more than
5.39 million shares, which was about two percent of the float. That
was on top of an increase of more than 16% in the previous period.
The days to cover is less than three.
The company has a market cap near $285 billion but does not offer a
dividend. It has a long-term EPS growth forecast of almost 15%, and
its P/E ratio is less than the industry average. Also, Google's
operating margin also is higher than the industry average, and its
return on equity is almost 16%.
Of the 42 surveyed analysts, 32 recommend buying shares, with 12 of
them rating the stock at Strong Buy. They believe the shares have
plenty of headroom, as their mean price target is more than 13%
higher than the current share price. That target would be a new
Shares have traded mostly between $850 and $900 since May. The
share price is up more than 18% year-to-date. The stock has
underperformed not only Yahoo and Facebook over the past six
months, but the
(INDEXNASDAQ:.IXIC) as well. It has outperformed the
Short interest in the San Francisco-based online social games
operator rose more than 28% to around 29.32 million shares during
the period. That ended three consecutive periods of declining short
interest, and it represented more than 5% of Zynga's total float.
Zynga withdrew its application for an online gambling license from
the state of Nevada during the period. The company has a market cap
of less than $3 billion. The long-term EPS growth forecast is about
30%, but note that the return on equity is in the red.
For at least three months, the analysts' consensus recommendation
has been to hold shares of Zynga. Note also that the share price
has overrun the analysts' mean price target. So, until price
targets are raised, no upside potential is indicated.
The share price jumped almost 28% in September, though it has
pulled back about 7% in the past week. Over the past six months,
the stock has underperformed
(EA) and Facebook, as well as the Nasdaq.
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