Social Media Stocks: RBC Reveals Picks And Pans

Courtesy of Benzinga.

The Internet space is at an all-time high nowadays in terms of market capitalization and valuations, Mahaney explicated. However, some of these stocks are still worth buying – while some others are clearly worth avoiding, he continued.

Facebook

Among the stocks Mahaney likes is unsurprisingly Facebook Inc (NASDAQ: FB).

The social media behemoth “continues to prove that it can sustain close to 60 percent advertising revenue growth, 1.5 billion users, people who engage more and more with Facebook on a daily basis; so that’s still a winner on our book,” he stated.

Related Link: Benzinga’s Top Upgrades

LinkedIn

Also on the analyst’s Buy list is LinkedIn Corp (NYSE: LNKD).

Although the stock has been slightly underperforming year-to-date, RBC thinks the company offers “a very good platform [with] 400 million registered users, rising levels of engagement, high levels of profitability.”

Stocks To Avoid

Mahaney then went into stocks to avoid, among which he included Twitter Inc (NYSE: TWTR), since it trades at a more expensive valuation than either of the aforementioned, even though it offers slower long-term growth prospects.

“We’ve seen a lot of execution errors,” the expert added, assuring, “It’s going to take a while to turn this around, if they are able to do that.”

Other companies in the “stay clear” list included Yahoo! Inc. (NASDAQ: YHOO) and Groupon Inc (NASDAQ: GRPN), “stocks and companies that have been around for a while, that are going through near-term execution issues, uncertain option value and long-term growth outlooks that are also uncertain,” he concluded.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

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