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Garnry: Facebook a top pick at tipping point

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Facebook is seen by Peter Garnry, Saxo Bank’s Head of Equity Strategy, as a top pick at a tipping point. The main reason being that it now has a business model which requires minimal capital investment and, to a large extent, overheads. The firm simply has to try to maintain its user growth. In Q1 the firm reported 1.28 billion monthly active users, up 15% year on year and 802 million daily active users, up 21% year on year. Q1 operating margin was 43%, up from 26% in the first quarter of 2013. Peter says this is a "hugely profitable company which requires little R and D investment to maintain revenue, it's phenomenal".   
The Q2 results are expected to be good and confirm analyst consensus, most don’t just like facebook, they love it. Peter is no different he recommends that this is a stock to buy and hold, even share with your friends. The company performance is expected to show potential for future strength despite warnings from Janet Yellen that social media and tech stocks are “stretched”.