Shares of Facebook, Inc. (FB), which declined 10.3% in the past three months, didn't end 2016 on a strong note, thanks (in part) to the polarizing topic of "fake news," which dominated the headlines to end the year. 

Facebook stock closed Friday at $115.05, still gaining 10% year to date, slightly outperforming the 9.5% rise in the S&P 500 Index (SPX). But Facebook stock still looks like one of the better bargains heading into 2017. Despite the topic of fake news, the Menlo Park, Calif.-based social media giant, continues to crush Wall Street's expectations in just about every the notable metric. Not to mention, the company makes real money. As such, here are two reasons to expect real returns in 2017.

Reason No. 1 - Compelling Valuation 

Facebook shares have fallen 14% since reaching a 52-week high of $133.50 on Oct. 25 on fears that revenue growth will slow, while capital expenses will rise in the quarters ahead. However, Facebook stock trades at an attractive discount not only to its earnings growth potential, but also on the company's ability grow profit margins.

Fiscal 2017 estimates calls for $5.21 per share, which prices the stock at a forward P/E of just 22. While that's still four points above the S&P 500 Index, it calls for year-over-year EPS growth of 27.4%. What's more, fiscal 2018 estimates of $6.56 implies EPS growth of 26%. Good luck finding another S&P 500 stock that can deliver average earnings growth of better than 25% in the next two years.

Reason No. 2 - Buying Back Stock

Facebook still believes that its stock is one of the better places to invest. In November, the company's board of directors has approved a share repurchase program of up to $6 billion. The filing with the Securities and Exchange Commission suggests that the buyback will begin in the first quarter of 2017.

Facebook, which didn't specify when buyback program would end, had about 3 billion common shares still outstanding as of the most recent quarter. JPMorgan analysts Doug Anmuth, who has an Overweight rating on the stock and $175 price target, called the $6 billion stock buyback a “bullish sign” for the company. Anmuth's price target implies potential 2017 premium of 52% in the next twelve months.

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