Back into an Alpha Algorithm Favorite

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

Online social media giant Facebook, Inc. (FB) is a perennial favorite among Alpha Algorithm strategies. It is also a stock that you already have held and were stopped out of for a double-digit-percentage gain earlier this year.

With the stock bouncing from its recent lows and nine Alpha Algorithm strategies investing in the company, I am recommending that you re-enter this position.

Founded in 2004 and headquartered in Menlo Park, California, Facebook, Inc. operates the world’s largest social networking site, with over one billion daily active users. Its solutions include Instagram, Messenger, WhatsApp Messenger and Oculus virtual reality technology.

FB chart 11-30

Facebook vs. the S&P 500 YTD

Nine Top Investment Strategies Betting on Facebook, Inc. (FB)

  1. Hedge Fund Alpha

Based on publicly available disclosures, successful hedge fund managers are investing in the stock.

  1. Hedge Fund Gurus

The stock is one of the top U.S.-listed equity positions reported on Form 13F by select hedge funds with concentrated top holdings.

  1. Goldman Sachs’ Active Beta

The stock is selected according to four factors — value, quality, momentum and low volatility. These, in turn, are based on criteria including book value, sales and cash flow scaled by share price, profit/assets or return on equity (ROE), risk-adjusted returns and daily standard deviation of returns.

  1. Value Tilt

Selected using a multi-factor modeling approach, this is a value stock designed to enhance portfolio risk/return characteristics.

  1. IPO Index

The strategy tracks a market-cap-weighted index of the 100 largest U.S. initial public offerings (IPOs) over the first 1,000 trading days of each stock. Stocks must pass additional quantitative screens as well.

  1. Momentum Factor

The stock also is one of the top 120 large- and mid-cap U.S. stocks exhibiting relatively higher price momentum, as measured by a specific factor which has historically driven a significant part of companies’ risk and return.

  1. Large-Cap Growth

The stock is among the top 50 large-capitalization U.S. growth stocks generated through a rigorous 10-factor fundamental screening process.

  1. Pure Growth

The company is part of a strategy that selects companies from the S&P 500 Index, based on three growth factors: current internal growth rate, historical earnings per share (EPS) growth and historical sales/share growth.

  1. Large-Cap Momentum

The stock is part of a major hedge fund’s systematic strategy that invests in large- and mid-cap U.S. companies with positive momentum and that rank in the top third of total return over the prior 12 months, excluding the last month.

Exclusive  The "Indiana Jones" of the Cell Phone Industry

Recommendation

Buy Facebook, Inc. (FB) at market today. Place your initial stop at $107.

I am holding off on a Facebook options recommendation at this time as the market seems oversold after its recent rise.

Portfolio Update

Raise your stop in UnitedHealth Group Incorporated (UNH) to $156.65 to lock in at least a 10% gain in this position.

Sincerely,

Nicholas Vardy

Nicholas A. Vardy

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