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Facebook stock ‘richly priced’: Expert

Wednesday, 31 Jul 2013 | 2:53 PM ET
Facebook stock 'richly priced': Expert
Wednesday, 31 Jul 2013 | 12:08 PM ET
It's time to take profits in Facebook after the run-up in its share price, NYU professor Aswath Damodaran says.

It's time to take profits in Facebook after the run-up in its share price, New York University Stern School of Business Professor Aswath Damodaran said Wednesday.

Damodaran noted that he had valued Facebook stock five times over the past year, with a range of $24 to $28.

"So, the value of the company hasn't actually wavered that much over the last year and three months," he added. "I don't share the euphoria that people have about mobile monetization because I think they needed to do that. If they hadn't done it, it would've been disastrous. At $38, I think the stock is richly priced."

On CNBC's "Fast Money," Damodaran said he wouldn't consider the stock a "buy."

"I'd be a seller today," he added.

Damodaran said that the company remained in a strong position within mobile media.

"In a sense what they've done is, as somebody described it, taken away that uncertainty. And that's a good thing," he added. "Facebook in many ways is a much better company today than it was a year ago, a much more solid company. As an investment, it's not as good an investment."

Why I'm Buying Facebook Stock: Cooperman
Facebook could reach a market capitalization similar to Google's, Leon Cooperman of Omega Advisors says.

(Read more: Why Facebook stock keeps climbing)

Earlier, Mike Santoli of Yahoo Finance had said that the company remained a show-me story.

"Perception has changed more than reality with Facebook, I think," he said. "I mean, now you're hearing it being discussed as 'The Biggest Media Platform' and competing for television-style ads. It was always there, but now people are focusing on the positive."

OptionMonster's Jon Najarian characterized Facebook as the top player in the sector.

"There were a number of folks that had bet against them being able to monetize mobile in the way that they have," he said. "This is the No. 1 story in the monetization of mobile right now. I mean, they are bigger and better, and doing a better job than anybody else in the space because of how people use Facebook."

(Watch video: Why I'm buying Facebook stock: Leon Cooperman)

For Google, he added, that would be a "series of acquisitions."

Breaking above its initial public offering price of $38 would be difficult Simon Baker of Baker Avenue Asset Management said.

(Read more: Facebook's a 'small buy': Mark Mahaney)

"I think a better position here would be Google," he said. "I'd be long Google."

TheStreet CIO Stephanie Link said that liked Facebook long-term over Apple.

"I look at Apple, and I say, 'My gosh, this stock is so cheap.' It's underperformed. I kind of gravitate toward that as a contrarian investor," she said. "It's cheap with lower expectations, but I don't think it's going to break out until you see new products."

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

Trader disclosure: On July 31, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Michael Santoli is long BAC; Michael Santoli is long C; Michael Santoli is long YHOO; Simon Baker is long AAPL ; Simon Baker is long C; Simon Baker is long GS; Simon Baker is long JPM; Simon Baker is long GOOG; Simon Baker is long EBAY; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long EBAY; Stephanie Link is long TKR; Stephanie Link is long JOY; Stephanie Link is long AIG; Jon Najarian is long AAPL; Jon Najarian is long GS; Jon Najarian is long JPM; Jon Najarian is long XLF; Jon Najarian is long HLF; Jon Najarian is long HUN; Jon Najarian is long MAR; Jon Najarian is long TMO; Jon Najarian is long WLL; Jon Najarian is long SYMC.

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