WHY I’M SELLING SNAP INC
I’ve decided to remove Snap Inc (NYSE: SNAP) from the stock of the month. It’s been a good run. As of Friday SNAP is up 82.1% from my pick price. This bests the S&P 500 by 75.0% over the same timeframe.
I still love what the company is doing – growing its user base amongst young people and staying clear of divisive political content. However, I think that its young userbase is a potential long-term weakness.
Advertising to young people is great for brand awareness campaigns. From a young age, we already associate castles with Disney (NYSE: DIS) and red soda cans with Coca-Cola (NYSE: KO). However, this demographic isn’t great to send shopping ads. They just don’t have the same amount of disposable income that an older demographic might have.
As much as I’d love to see the company grow and prosper, I think that this younger demographic will be a crutch for them in the long run.
So what do you think about Snap Inc? Leave me a comment below. Thanks for reading!
Stats (as of 7/10/2020)
- Pick Price: $14.02
- Closing Price: $25.23
- Performance: 80.0%
- Performance vs S&P 500: 75.0%
I/we am long DIS, KO
Except for Wolves of Investing, I/we are not receiving any compensation from and do not have any business dealings with any companies discussed in this article.
stock of the month results
Every month I pick a stock that I believe has long-term potential to beat the market.
download my free investment ebook
Learn some of the tips that I wish I had known before I started investing.
Videos on stock investing
Check out our video series and gain valuable insight into investing.
Donnie Nguyen is the founder and CEO of Wolves of Investing. He started investing in the stock market in the early 2000s. He follows the teachings of Peter Lynch, Warren Buffett, and other investing legends. When he's not investing or blogging, he loves spending time with his family traveling and experiencing the world.
Follow Donnie on Facebook and Twitter!