Alpha Algorithm Targets a Social Media Giant

Nicholas Vardy

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

This week, the Alpha Algorithm selected social media giant Facebook, Inc. (FB), which emerged this past week as the single largest holding across all the Alpha Algorithm strategies I track.

Founded in 2004 and headquartered in Menlo Park, California, Facebook, Inc. operates the world’s largest social networking site, with over 1 billion daily active users. Its solutions include Instagram, Messenger, WhatsApp Messenger and Oculus virtual reality technology. Facebook shares soared recently after the social media behemoth reported earnings of $0.77 per share, $0.15 ahead of the Street’s consensus, on revenue of $5.38 billion, which was up by 52% year over year and also beat estimates by $120 million.


Facebook vs. the S&P 500 YTD

Seven 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. 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. Value Line Model

The stock is among the top 100 stocks, from a universe of 1,700 stocks, to which Value Line gives a #1 ranking in its Timeliness Ranking System.

  1. IPO Index

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. Small-Cap/Value Tilt

Selected using a multi-factor modeling approach, the stock is one of smaller-cap and value stocks designed to enhance portfolio risk/return characteristics.

  1. Large-Cap Alpha

The stock is selected as part of a strategy that aims to outperform the S&P 500 by classifying securities as either growth, value or both, discarding the lowest-scoring 25% and weighting the strategy toward the top-ranked stocks.

Exclusive  Offering Cost-Effective Solutions to International Investing


Buy Facebook, Inc. (FB) at market today. Place your initial stop at $104.


With the stock technically overbought on the short term, I am holding off on recommending options this week.

Portfolio Update

Although Apple (AAPL) flirted with its stop price of $91.00, it has steadied above that level over the past week. It is technically oversold, and due for a rebound. Nevertheless, keep your eye on this position.

McDonald’s (MCD) crossed $130 for the first time yesterday as it hit an all-time intraday high of $130.38.

Nicholas Vardy
Nicholas A. Vardy

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