All-time highs, hefty percentage gains — what’s not to like about the market, or maybe more fittingly these days, that market euphemism FANG? Maybe nothing, but if you want to take a “bite” out of the market, it might be a very good time to look elsewhere. Let me explain.
When you think of large-capitalization tech stocks and the market for that matter, it’s hard to not think of FANG. FANG of course is the acronym behind Facebook Inc (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX) and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), i.e. the company formerly known as Google.
In fact, FANG has become so commonplace, it even spawned FAANG so as to not leave out the world’s largest publicly traded company and technology giant Apple Inc. (NASDAQ:AAPL).
No doubt investor interest in FAANG has been more than well-deserved. While each of those names has had its hiccups on and off the price chart over the last few years, the group has also scorched an incredible run in the broader market. And in 2017, there almost seems to be no end in sight for that bullish trend.
Compared to the S&P 500 and its gain of around 10%, FAANG are up 23% to 39% with GOOGL being the slug at just slightly more than twice the market’s gain and FB being the most liked by investors. But in playing the devil’s advocate role, and because FAANG has been so hot, could it be the right time to acknowledge a rotation within large-cap technology stocks is inevitable? I like to think so.
Swallowing that logic, it’s time to take a “bite” out of the market with Baidu Inc (ADR) (NASDAQ:BIDU), Illumina, Inc. (NASDAQ:ILMN), Tesla Inc (NASDAQ:TSLA) and Electronic Arts Inc. (NASDAQ:EA) — four large-cap tech names I’ll coin “BITE.”
So, let’s take a look at BIDU, ILMN, TSLA and EA individually, both off and on the price chart, as well as provide an options strategy to fit the situation.