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?
Global phenomenon Google, listed under its parent name Alphabet, came up against some headwind at the end of 2016, according to EQ Investors’ Kasim Zafar.
Portfolio manager Zafar said: “The latter part of 2016 also saw some added headwind for FANG and related internet stocks with the so-called Google tax in the UK and election of President Trump off the back of which similar tax enquiries are expected for these companies in the US.”
However, despite these headwinds Google is still a big player, posting revenue growth of 22.2% and is a ‘buy’ option for Morningstar’s Brian Colello while AXA’s Gleeson said he would “buy more if he could”, having an already significant weighting in the search engine firm.
Colello said the key area of potential for both Google and Facebook lay in digital advertising.
“These are the biggest two companies be far in the digital advertising space so we’re still optimistic. The stocks are fairly priced so it’s a chance to buy,” he said.
Andrew Herberts echoed the confidence in the stock, saying it had “already shown it can deliver” and Kasim Zafar said it would be “hard not to like” companies that “form the backbone of our interconnected digital worlds”.
On the whole, there will be growth across the FAANGs this year Andrew Herberts concluded, but the real question facing investors is on cost and they should ask themselves “how much do you want to pay for growth?”
Tags: FAANG | Investment Strategy
