FANG Stocks May Be Maturing But They’re Far From Dead

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FANG stocks - FANG Stocks May Be Maturing But They’re Far From Dead

If you’re not familiar with FANG stocks, you simply aren’t paying attention. Whether or not you know the acronym, there’s a good chance you’re familiar with the names that FANG represents.

FANG stocks are shorthand for some of the hottest tech stocks out there: Facebook, Inc. (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX), and Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL).

Tech has long been a sector known for its outsized upside potential, so expectations for FANG stocks are high, to say the least. When FANG stocks lost $88 billion in market cap during a week in late April, as CNBC reported — generously rounding the figure to $100 billion in its headline — some people began speculating that FANG stocks might be dead.

That’s laughable.

A Look at FANG Stocks

Facebook is no stranger to bad publicity. The level it’s faced in recent months related to data privacy and Russian collusion landed Mark Zuckerberg testifying in front a Congress. And yet, despite that, shares of FB stock have still managed to gain 22% over the last 12 months — 9 percentage points more than the S&P 500.

Not bad for an off-year.

The worst performer of the FANG stocks is Google. But the company changed its name to Alphabet. Maybe it just wants to stop being associated with the FANG crowd.

Jokes aside, GOOGL stock has moved sideways to the tune of 15% gains over the last 12 months. Recently, investors have been concerned about the cost of traffic for the behemoth search engine. But that supposed downside could also be an upside. In fact, analyst Ben Schachter praised Google for the very thing that investors got skittish about, comparing Google positively with fellow FANG member Amazon in its willingness to invest in “large opportunities for long-term growth.”

Speaking of Amazon, AMZN stock has gained almost 70 percent in the last year and is currently sitting at nearly $1,600 a share. Sound dead to you?

For the cherry on top, NFLX stock investors are laughing all the way to their banks with claims that FANG stocks are dead. The stock has doubled in the last 12 months. Once again, the S&P 500 has barely posted double-digit gains during that same time period and has posted unimpressive 2% year-to-date gains.

That’s not to say that FANG stocks aren’t changing. These companies are maturing and growth is naturally harder to come by the bigger you are.

Bottom Line on Fang Stocks

So if you’re comparing Facebook stock and Amazon stock to what were essentially their grade-school days, well, yes, you will be a bit disappointed.

But to call the stocks dead is hyperbole — and a great way to miss what continue to be solid investments.

As of this writing, Robert Martin was long FB.


Article printed from InvestorPlace Media, https://investorplace.com/2018/05/fang-stocks-far-from-dead/.

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