Friday newspaper share tips: Facebook, LinkedIn and Wincanton
LinkedIn's sheer number of users -- more than the US has citizens -- didn't prevent it from getting bought out by Microsoft, writes the Financial Times' Lex column.
FTSE All-Share
4,377.17
10:55 23/04/24
FTSE Small Cap
6,437.33
10:55 23/04/24
Industrial Transportation
4,106.14
10:54 23/04/24
Linkedin Corp
n/a
01:17 11/01/17
META PLATFORMS
$481.73
13:04 22/04/24
Nasdaq 100
17,210.88
12:15 22/04/24
Twitter Inc
$53.70
11:00 08/03/24
Wincanton
601.00p
10:39 23/04/24
The deal was at a price a quarter below LinkedIn's peak share value, and perhaps revealed that the online CV company wasn't able to convert users into steadily growing revenue dollars.
From this perspective, wrote the column, social-network Facebook did not appear to receive enough credit for the palette of products that marketers paid for. Facebook's monthly users now totted up to 1.6bn.
"Growth, however, has naturally slowed -- it is now in low single digits between quarters," wrote Lex. In the most recent quarter, revenue growth was a whopping 51%.
"Facebook was prescient enough to see the emerging significance of mobile devise usage and, now, video streaming," the column observed.
Yesterday, Facebook revealed it would allow companies to access its vast vault of user data, before they even formulated their marketing campaigns.
Facebook data was already available for ad targeting or measurements of effectiveness, Lex said.
"Having such key information of a fifth of the world's population and providing it in a package that marketers want is a formidable business advantage," the column said.
Lex added that Facebook accounted for about a tenth of gross US digital ad revenue, but, data showed, it contributed 28% of total growth in this market in 2015, versus Twitter's 4%.
"User additions can stall, but for the best social networks, revenue growth should not," it added.
Meantime, The Telegraph's Questor suggested a 'Buy' on haulage firm Wincanton, observing that the shares looked cheap and came with a dividend.
Its shares had risen 16% or more over the past week after solid results, the benefit of a multi-year turnaround programme. The column reckoned the Wincanton looked good for further gains or a takeover.
Questor pointed to the well-trod story behind the company -- it expanded too quickly prior to 2008 and found itself lumbered with too much debt in the downturn.
But, on the other hand, it had made a decent fist of repaying much of that debt over the past eight years, emerging with appeal for longer term backing as an investment.
Questor noted that the haulage sector was not fast-growing or highly profitable, but without undue risks could be steady and cash-generative.
Wincanton's revenue rose 4% to £1.1bn and its pre-tax profits more than doubled to £65.8m in the year to end-March.
"The reported figures enjoyed a one-off boost from the sale of the records management business, but even excluding this the underlying pre-tax profits gained 12% to £35.3m," the column said.
"Management were confident enough to announce a return to dividends with the 5.5p final, going ex-dividend on July 6 and paid on August 5," said Questor, adding the final dividend implied a full-year payment of about 8.25p.
"The shares look cheap trading on eight-times earnings and offering a prospective dividend yield of 4.5%."