The big story with Pinterest (PINS) is its one-of-a-kind story that features picture and video boards of ideas and products, explains Mike Cintolo, editor of Cabot Top Ten Trader.
Facebook (FB) and Twitter (TWTR) are the go-to social media players in real life, but in the stock market, there’s been a shift. Indeed, while those two will still get a huge portion of ad dollars, more and more money is shifting to newer platforms that allow advertisers to get in front of a consumer at a different stage of the process.
Pinterest is a site where people go to get ideas (everything from ideas to arrange a new home office to new recipes to gift ideas) on what they want, as opposed to hitting a site (Amazon, etc.) where they already know what they want and are looking for the best price.
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The movement of ad dollars to Pinterest’s site (along with improved search and marketing tools) is now showing in the results—sales boomed 58% in Q3 while earnings were well into the black, and analysts see 30%-plus growth for many quarters to come.
As for the stock, PINS built a year-long IPO base, broke out in September, and has acted well since then. Near-term potholes aside, it’s likely PINS has just started a major advance as it joins the market’s group of new leadership. We’re more than willing to give the stock plenty of room to maneuver.
Big picture, if things fall into place, we think the stock’s initial breakout from a big post-IPO base in September and its one-of-a-kind, idea-generating e-commerce website will make this a must-own stock among institutional investors.
