Forager increases Meta exposure
Meta, the owner of Facebook and Instagram, is one of the “world’s best businesses”, according to Forager.
In an update for its Forager International Shares fund, chief investment officer, Steve Johnson, said the firm was adapting its business to deal with headwinds it faced. This included challenges from rival TikTok as well as privacy changes and geopolitical issues.
Founder Mark Zuckerberg had also committed to investing in Meta which would boost profitability of its advertising business.
“Geopolitical issues are negatively impacting both users and advertising spend for the business. It is also still facing headwinds from Apple’s privacy changes and increasing competition for consumers. TikTok isn’t going away anytime soon. But Meta is learning to adapt, as it has done many times in the past.”
The share price of the stock had fallen 43% since the start of the year versus losses of 18% by the S&P 500 but Johnson said this had reaffirmed this commitment to the stock and had increased his weighting.
“Our view remains that this is one of the world’s best businesses. Investor sentiment has swung from overly optimistic to wildly pessimistic. At its April lows, Meta’s share price was just 13 times last year’s earnings.
“While we had no idea it was going to trade so low, we continue to believe our modest expectations at the time of purchase were justified and have added to the investment while it is deeply out of favour.”
AUTHOR
Laura Dew
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