Why Facebook Is Poised to Keep Fading

Market-lagging returns could be written in this 1-Star.

Brian D. Pacampara, CFA
Brian D. Pacampara, CFA
Mar 28, 2013 at 9:35AM
Technology and Telecom

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, social networking giant Facebook (NASDAQ:FB) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Facebook and see what CAPS investors are saying about the stock right now.

Facebook facts

Headquarters (founded)

Menlo Park, Calif. (2004)

Market Cap

$62.2 billion

Industry

Internet software and services

Trailing-12-Month Revenue

$5.1 billion

Management

Founder/Chairman/CEO Mark Zuckerberg

CFO David Ebersman

Return on Equity (average, past 3 years)

0.6%

Cash/Debt

$9.6 billion / $2.4 billion

Competitors

Google

LinkedIn 

Twitter

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 40% of the 1,748 members who have rated Facebook believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, OklaBoston, kindly updated our community on the Facebook bear case:

Ended a red thumb on this a while ago when I thought it had bottomed. It's gone into another downtrend since then, insiders have been selling, and the valuation numbers are still absurd. So I'm resurrecting a pick I'm not sure I should ever have ended.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.