Twitter’s lagging stock performance highlights’ peers’ attractive prospects

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By J Maslow

Twitter running on an iPhone
Woman holding iPhone while using Twitter.

Too many investors are under this mistaken assumption that there is some hard science under-girding stock market sentiment. The ‘technician’ school of stock trading psychology tend to focus too much on herd thinking. They believe that a stock’s price is a reflection of the herd mentality of the traders of that stock. Simply gauge the overall market sentiment and you’ve got all the information you need to either cash in as the stock tanks or shoots up. Regardless of the merits of this particular type of stock analysis, one thing’s indisputable: when you see one particularly notable member of a class of stocks trading near its 52-week low, it’s a good time to check out how its peers are faring and, possibly, pick up the best of the litter. After all, stock value is often comparative. In many cases, it’s not the inherent value of the stock per se that matters as much as the perceived value of other equities in its particular category.
Twitter’s not doing so hot lately-the opportunity may be found elsewhere

Trading close to its 52-week low of 29.51 and very far from its 52-week high of $74.73, Social media darling Twitter’s (NYSE:TWTR) recent performance gives us an opportunity to check out how other social media plays are doing. Facebook (NASDAQ:FB) is looking quite interesting even at its current $81.50 price. Facebook’s working on its own ad platform and the video component of the platform looks quite compelling indeed. Video and social media go hand in hand and any thoroughgoing effort at monetizing video would go a long way in beefing up FB’s bottom line. Considering its plans and its recent implementation of its strategy of squeezing more ad cash out of ‘organic’ page reach, FB looks like an interesting buy at $81.50. No wonder Citi group has a $91 price target for this stock.


Another stock Twitter’s floundering performance shines a comparatively flattering light on is LinkedIN (NYSE:LNKD). The human resources/personnel department-heavy professional networking site is currently racking up outperform and buy ratings from analysts. It is currently trading at $233 and analysts’ targets range to as high as $270. Unlike Twitter, LinkedIN has a targeted market and proven and sustainable revenue model and more durable membership life cycle. LinkedIn is definitely a great buy.



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