On Monday, Facebook, Inc. (FB) wasn’t in the news for its newest mobile updates or social media acquisitions. Instead, Facebook shares dropped more than 3% after news broke that one of the company’s board members, Marc Andreessen, sold 1.5 million of his Facebook shares—a very large portion of the shares he owned.
Predictably, this has people talking. Is there a reason he sold so many shares? Are bad things happening in the company? Should we sell our Facebook shares, too?
My advice to you is to stay calm. After Andreessen’s sale, the stock did dip, but it has been steadily rising since then. What we need to understand is that this was a pre-arranged transaction, which indicates that Andreessen was taking advantage of the success of the company rather than showing a lack of confidence.
It’s also important to note that the Turner Analytics database rates Facebook as a buy. Not only is their earnings growth projected to outstrip the industry average, the company also has a very healthy cash flow, and analysts continue to raise their estimates for Facebook earnings. The company is expected to report 24% annual earnings growth and 39% annual sales growth in the current quarter.
My screens consistently show Facebook as an upward-trending stock that performs above the national trend, and all signs indicate that this will be the case moving forward, too. Facebook earns a solid fundamental score of 64 out of 100, and a good technical score of 74 out of 100.
If anything, the recent dip in FB shares is a good buying opportunity. My screens show that FB could move 5% higher in the near term—and even higher after that.
To stay on top of my latest stock rankings, consider subscribing to my Turner Analytics database. And if you aren’t already fully invested and would like handpicked stocks, consider subscribing to Signal Investor.