As this Facebook stock analysis shows, Facebook Inc. is suitable for the Enterprising Investor but not for the Defensive Investor. The Defensive Investor is concerned by the short operating history as a publicly traded company, as well as the high PEmg and PB ratios, while the Enterprising Investor is only initially concerned by the lack of dividends.
After reviewing the data, it is clear that conservative value investors may wish to seek other opportunities. The Defensive Investor is concerned with the low current ratio in combination with the lack of dividend payments and high PEmg and PB ratios, while the Enterprising Investor has concerns with the low current ratio and lack of dividend payments.
Facebook qualifies for the Enterprising Investor but not the Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth or stability over the last ten years, the lack of dividend payments, as well as the high PEmg and PB ratios.
Facebook is suitable for the Enterprising Investor but not the Defensive Investor, as the Defensive Investor is concerned with the lack of dividends, short operating history, and high PEmg and PB ratios. The Enterprising Investor’s only concern at this point is the lack of dividends.
