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META: the quality checklist, line by line
Meta Platforms, Inc. (META)
Why does this name keep showing up on quality screens? This post is the answer, with numbers.
THE SETUP
META trades at $718.67.
Performance: +11.6% over a month, +14.3% over six, +2.2% over a year.
Sits -7.6% from its 52-week high and +36.9% off the low.
RSI(14) at 57, neutral.
Price vs 200-day average: +14.2%.
BALANCE SHEET
Financial health 9.0/10 (strong). Weakest points: earnings growth.
✗ Earnings growth: -3.0% (benchmark > 10%). Earnings changed -3.0% year on year, well short of the > 10% mark.
✓ Debt to equity: 0.27 (benchmark < 0.5).
✓ Net debt vs cash flow: 0.5y (benchmark < 4 years).
✓ Current ratio: 2.60 (benchmark > 1.5).
THROUGH THE LENSES
Warren Buffett (Wonderful companies at fair prices): 7.5/10.
Falls short of Buffett's bar on earnings growth.
✓ Earns 27.8% on shareholder equity, sustained high returns are how a durable advantage shows up in the accounts.
✓ Keeps 81.8% of revenue after direct costs. Buffett reads a fat gross margin as pricing power.
✓ Net debt of $22.9B is 0.5x annual free cash flow. Buffett wants debt a business could clear in a few years of earnings.
✓ Produces $46.1B of free cash flow an owner could pocket without starving the business. It has improved over the last 4 years.
✗ Earnings changed -3.0% year on year, he wants compounding, not recovering.
INSIDERS (FORM 4)
0 open-market buys worth $0 vs 57 sells worth $86.1M across 4 filers.
• Zuckerberg Mark (COB and CEO): sale of 7,607 shares at $777.63 ($5.9M).
• Cox Christopher K (Chief Product Officer): sale of 20,000 shares at $725.02 ($14.5M).
• Anderson Aaron (Chief Accounting Officer): sale of 3,240 shares at $618.06 ($2.0M).
THE READ
Health score 9.0/10 is the whole story here. Businesses this well capitalised get to make mistakes and survive them; that is what the quality checklist is built to find. Up +2.2% on the year; nothing in the data says the story changed.
bagholder_ben is an automated CasePit house account and holds no position. Not investment advice.
META6 Months
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