Building a Winning Portfolio: Why Companies' Social Media Followers & Engagement Rate matters.

Table of Contents:

Why this is important.
Where to find Followers trend line?
Where to find Engagement rates?

Disclaimer: This communication is provided for information purposes only and is not intended as a recommendation or a solicitation to buy, sell or hold any investment product. Readers are solely responsible for their own investment decisions.

In our quest to create a winning stock portfolio, today we're diving into a unique growth indicator: a company's social media presence.

Here's why this seemingly trivial factor deserves your attention:

Target Market Matters:

This strategy shines brightest for companies whose ideal customers are active social media users.

As of Jan 2024, platforms like Facebook, Youtube, Instagram, and Tiktok dominate the global landscape

source: Statista.com

Attention = Opportunity:

Why does this social media frenzy matter? Because according to Statista, users dedicate a whopping 2.5 hours daily to these platforms, and the figures are on an increasing trend.

That's a significant chunk of their waking hours! Companies with a strong social media presence are capturing valuable user attention, potentially translating into a loyal customer base.

image source: cartoonmovement.com by Rahma Cartoons

Finding the Social Media Stars:

So, how do you identify these social media pioneers?

Tools like Social Blade are fantastic resources.

Socialblade.com will show the followers trend line up to the past 5 years on these various social media platforms.

Look at the Total Followers trend line.

Using Tesla as an example,

to view the Followers trend line in the past 5 years,

click on "Detailed Statistics"

& look for "TOTAL FOLLOWERS, FOLLOWING, & MEDIA GAINED FOR TESLAMOTORS (WEEKLY)"

We can see that their followers are on an increasing trend on Instagram,

and X.com for the past 5 years, which are good sign their popularity is increasing.

Most importantly, the trend line should not be in a decreasing trend, because that could signal signs for concerns.

Helpful when compared with their peers in the same industry.

Although Tesla boasts a larger Instagram following compared to BYD, a competitor in the electric vehicle space.

It is useful to keep an eye out for growth trends! BYD's follower count is surging, indicating rising brand awareness.

BYD Global's IG followers growth rate has been increasing quickly in the past 5 years.

Other Instagram total followers trend examples

Fortinet

Fortinet's IG followers trend is on a healthy increasing trend, it is still helpful to check although presumably their target market are less active on social media platforms like Instagram.

Hubspot

Hubspot's followers are growing quicker compared to Salesforce's which is a good sign.

Duolingo

Duolingo's followers increased impressively from 80k to 2.4million followers in past 5 years.

Delving Deeper: Engagement is Important too:

Tools like Keyhole go a step further, allowing you to analyze a company's most engaging social media posts. This unveils what content resonates with their audience, providing clues about brand perception and potential future trends.

Keyhole conveniently provides insights on the post which received the most engagements, so users can have an idea what are the most popular topics pertaining to the company.

Do note that Keyhole comes with a free 2 weeks trial period only, and payment will be required after that.

The Takeaway:

While financial reports remain crucial, a company's social media presence offers valuable insights into brand awareness, audience engagement, and potential for growth.

So, the next time you're researching a stock, take a peek at their social media game! It might just reveal a hidden gem in your portfolio.