Is there still opportunity to be found in the FANGs? (or Apple?)
15 Feb 17
They are used to double-digit revenue growth and boast some of the most well-known brands in the world, but do the likes of Facebook, Amazon, Apple, Netflix and Google (FANG) still offer opportunities this year?
Of the FAANG companies, it seems streaming service Netflix is one to be wary of with doubts raised over the prospects for its international expansion and content costs perhaps taking the shine off what is fundamentally a solid business model.
Brian Colello said: “Netflix is a great business but we think it’s extremely overvalued. We are sceptical on its international expansion and of the pricing power it has. We think there’ll be a rising cost of it licensing content and with Amazon Prime and others there will be more competition out there.”
“It’s possible that Netflix’s share price gets squeezed, but we think investors could be disappointed by it.”
Current valuations of Netflix’s earnings suggest it will see increases of 250%, according to Andrew Herberts, which is “unsustainable” and therefore might not be a current attractive investment he added.
Tags: FAANG | Investment Strategy
