$Meta Platforms, Inc.(META)$The most notable cheap stock is Meta Platforms (née Facebook). Meta is priced at 3.5 times run-rate revenue, 12 times earnings and under 8 times EBITDA. The earnings are suppressed by large expenditures on a future 3-D world (the “metaverse”) which presumably has lots of revenue opportunities (but which strains our sense of credulity). Whatever – the traditional business has had revenue growth for over a decade and the revenue growth has never gone under 20 percent. Realistically it will now though. Competition from TikTok is a threat, as is increased regulation. Finally, the original Facebook plaform (but not Instagram) has declining appeal to young people. In the twelve months ending 31 March 2022, the company repurchased over US$50 billion in common stock mostly funded by cash generated, but also by running down cash balances somewhat.

To not make money in this stock, the future has to be far worse than the past or present. That is certainly possible. Facebook has behaved very badly, never letting privacy concerns or ethics stand between them and a pile of dollars. The Cambridge Analytica scandal happened to Facebook, not to Google. The European Union in particular has passed privacy regulations that are extremely hostile to Facebook’s business. The future could go very wrong. We think we will make money in this stock, but we are not sure