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Why Facebook Inc (FB) Is A Great Long-Term Investment Stock

The stock market is a terribly confusing place, and deciding where to go can be a perilous experiment especially for a beginner investor. Nonetheless, within the labyrinth, a few stocks pop up that hold a solid chance of being a forever investment, and are reliable through good and bad times. Facebook Inc. (FB) is a top contender under this respect.

facebook stock

In fact, difficult not to paint the stock in good light. In 2016, its shares were up 14 percent, which is approximately double the S&P 500 index 7 percent return in the same year. Since initial IPO in 2012, the Facebook stock has risen 213 percent, tripling the 69 percent return of the S&P 500.

Today, Facebook still manages to report stellar growth almost every quarter, owing to its dominance in social media usage, and ad spending. Facebook can continue to maintain the phenomenal run, and even gain more momentum in the future; here is why.

Facebook – Constant Innovation

Many investors have been expecting what would seemingly be the eventual slowdown of the social media giant’s growth, but they were recently disappointed. In its third quarter, after putting video first, the company has reported a 59 percent improvement in ad sales revenue. This accounted for $6.8 billion out of the total $7 billion in revenue.

Brilliant Founder

With an innovative and brilliant founder Mark Zuckerberg, and his proven track record, investors can rest assured that Facebook is in good hands as he knows where he wants to get his company. Keep in mind that such brilliant founders have tended to work exceptionally well for shareholders. For instance, companies such as (AMZN), Alphabet (GOOGL, GOOG), Netflix (NFLX), and Tesla Motors (TSLA) have had brilliant and innovative founders and excellent results.

Mobile Mastery

In this quarter of 2016, over 85% of all its ad revenue was from mobile, which is an improvement from 78% in the year before. As more consumers transition over to mobile platforms from their personal computers, the FB stock is ideally positioned.

Powerful Edge

Facebook essentially has a great 1.8 billion monthly active users, and the number is still growing. Many users find Facebook very addictive. According to experts, internet users spend more time on social media platforms than on any other digital activities. As such, Facebook is a very important global business channel. Every new person who joins the network adds more to its value, making more people want to join. This is the network effect where a service becomes much more valuable when more people use it.

Monetization Potential

Facebook now owns Instagram its only rival, and Whatsapp Messenger. Instagram has over 500 million active monthly users, though it still doesn’t contribute much to the breakneck pace of growth of Facebook. However, the platform is now increasing the number of ads, and its contribution should see more growth.

Besides Instagram, company owns Facebook Messenger, and WhatsApp Messenger, two massive messaging platforms. However, Facebook still hasn’t realized the monetization potential of these two and is strategically placed to dominate in the future.