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Chicago, IL - June 7, 2018 - Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: ( https://www.zacks.com/stock/news/306742/should-you-still-buy-the-fang-stocks )
Should You Still Buy the FANG Stocks?
Welcome to Episode #133 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by Dave Bartosiak, the Editor of Zacks Momentum Trader newsletter and Zacks Momentum Strategist to discuss, what else, the FANG stocks.
FANG stocks are breaking out to new highs again, including those in FANG 2, which in the BMO Fang Index 3x Leverage ETF (FNGU) means Alibaba, Baidu, NVIDIA, Tesla and Twitter.
Is it too late to get in?
Or is there more upside?
Lots of pundits are wringing their hands about valuation and comparing 2018 to 1999-2000, just before the dot-com bust.
Do the FANG Stocks Have Stretched Valuations?
1. Facebook FB is trading with a forward P/E of 25.3. This is the cheapest it's been since its IPO. In that year, in 2012, it had a median forward P/E of 198.
2. Apple AAPL has been a value stock for years. Just 2 years ago, in 2016, it traded with a forward P/E of just 12. It's not surprising that that's when Warren Buffett started to buy. It currently trades with a forward P/E of 16.7, which is its highest in years but is in line with the S&P 500.
3. Amazon AMZN has never been about a P/E. But Dave points out, that if you look at other valuations, such as the P/S ratio, which is just 4.29, it doesn't seem overly expensive.
4. Netflix NFLX has never been "cheap." Back in 2012, before the Crown, it was trading with a median forward P/E of 2,190. It has a P/E of 125 now. But investors are buying the growth story.
5. Alphabet GOOGL was cheapest in 2012 when it traded at 17x. Since then, it's traded in the 20s. Its current forward P/E of 28 is the most expensive the stock has been on a P/E basis in 6 years.
What about FANG 2?
Tesla is the only FANG or FANG 2 stock to be in the red for the year. It's down about 10%. Dave and Tracey talk about whether it is a buying opportunity or not.
Should you be in Alibaba or Baidu if a trade war breaks out?
And what's the story with NVIDIA? Does it still have its mojo?
Find out the answer to all of this and more on this week's podcast.
[In full disclosure, the author of this article owns shares of FB, GOOGL and AMZN in her personal portfolio.]
Tracey Ryniec manages the Insider Trader and Value Investor portfolios at Zacks.com. She hosts 2 weekly podcasts: Zacks Market Edge Podcast and the Value Investor Podcast . You can also catch her on Twitter at @TraceyRyniec .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
