Managing Director Michael A. Sansoterra of Silvant Capital Management LLC says Facebook Inc (FB) is an attractive stock from a traditional growth and secular trend perspective, particularly due to its mobile advertising and mobile penetration rates.
“There was a lot of concern around what the ad rates would look like for mobile versus desktop, but Facebook made the move aggressively,” Sansoterra said. “Once they did it, we saw them look a lot like Google (GOOG) in that they were going to dominate this space and take the lion’s share of mobile advertising.”
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Sansoterra says Facebook has maximized mobile through the social platform, which is a significant change to the way advertisers spend money. Sansoterra is seeing growth in a number of areas and also points to other applications Facebook can monetize.
“We watch in particular the mobile average user hours spent, number of interactions, and we’ve seen that number grow and grow sequentially. We think that’s an upside option for them over time, not to mention the fact that they haven’t really monetized Instagram yet and then have the ability to really have a higher set of operating margins than they are currently carrying,” Sansoterra said.
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