3 Reasons Facebook, Inc. Should Be Excluded From the Tech Sell-Off

Many tech stocks have been sold off recently. Fast-growing tech stocks with pricey valuations, in particular, have been hit rather hard. Investors seem to be reevaluating the bullish forward-looking expectations priced into the tech sector's fastest-growing stocks. Trading at about 18 times sales, Facebook (NASDAQ: FB  ) didn't escape this sell-off. In fact, the stock is down more than 10% in the past two months. But should Facebook really be a part of this correction? Senior Fool technology specialist Daniel Sparks doesn't think so.

While a rosy future is certainly priced into Facebook stock at today's valuation, Daniel explains in the following video that there are specific reasons a optimistic future is likely. Chief among the reasons, Daniel cites the social network's profitability. About 35% of the company's first-quarter revenue ended up on the bottom line -- that's a net margin very few companies can match. Even more, this net margin will likely expand in the future as Facebook scales its business as it continues to grow rapidly.

Find out two more reasons Daniel likes Facebook stock in the following video.

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  • Report this Comment On May 07, 2014, at 10:48 PM, floridaboyxxxxx wrote:

    I think people are afraid of Sheryl Sandberg selling shares every time the stock goes up 5%...She has been ruthless in what almost feels like an attack at investors.

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Daniel Sparks

Daniel is a senior technology specialist at The Motley Fool. To get the inside scoop on his coverage of technology companies, follow him on Twitter.

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