Facebook Inc. (FB, +1.12%) stocks hit a record intraday high in trading on Wednesday but still remains one of the most under-owned of the high-cap internet companies.
This conclusion was reached by Citigroup following a survey among the top 40 institutional investors representing 62% of the total institutional holdings in large cap internet stocks.
The survey looked at institutional investment in the ten internet stocks that provide the benchmark for the market segment relative to the S&P 500 index (SPX). The most overweight stock showed up as Expedia Inc. (EXP, -0.77%) at 215% while the most under owned was revealed to be Google Inc. (GOOGL, -0.86%) at -15%. The second most under owned stock is Facebook coming in at -12% relative to the S&P 500 index.
Citi admits to a potential error in its findings in that not all funds or portfolios are benchmarked to the S&P 500. This fact is particularly relevant to stocks with a high percentage of hedge fund ownership such as Expedia. The other area of potential error in the findings is that the institutional investors surveyed represent only 62% of the large-cap internet stocks forming the subject of the survey.
The survey results evoke interest because they are an apparent contradiction flying in the face of the company’s healthy growth in ad revenue in recent quarterly reports. The fact that the stock is sought after shows up in the fact that the price is up by almost 14% year-to-date, outperforming the broad S&P 500 by 11%, also on a year-to-date basis. Added to this is the fact that having reached a figure of $246.8 billion, the stock valuation has exceeded that of Wal-Mart Stores Inc. (WAL, -0.26%) which stands at $233.7 billion.
According to a MarketWatch article on the subject, Mark May of Citi Research said that they believe that Facebook and Google may have the greatest near term opportunity among large-cap internet companies to benefit from portfolio re-weighting if they perform consistently with current investor expectations.
The forecast by Citigroup is a 12 month target price of $97 for Facebook stocks which would be an increase of 10% on the recent ruling price of $88.95.
MT4 Chart: Facebook