The so-called FANG stocks—Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Alphabet (GOOGL)—have been all the rage throughout 2017. But things are slowing down for a few of them right now. In today’s blog, I’ll show you what’s going wrong with these stocks, and I’ll reveal the one FANG stock currently rising head and shoulders above the rest…
Let’s start with the 800-pound gorilla in the room, Amazon. It seems Amazon has its hands in just about everything today: retail, content production, content distribution, cloud storage and even more. But that hasn’t stopped it suffering from slowing sales and earnings growth. In fact, earnings growth is down -77% year-over-year. And that alone was -71% less than expected.
Now, that’s not the full story. Amazon does still have some positive factors to recommend it these days, including some new services and partnerships, but with a C-rating in Portfolio Grader, you can see why Amazon simply isn’t my favorite FANG stock right now.
Next, let’s take a look at Facebook and Alphabet. Both of these companies have recently fallen victim to privacy and government interference. With the government looking to curb “fake” news, both these companies have spotlights shining down on them right now. This hasn’t affected either of their financials significantly yet, but it has affected their respective grades in Portfolio Grader. Facebook, although still a Buy, has dropped to a B-rating. While Alphabet, like Amazon, is now a C-rated stock.
That leaves us with only one contender for my current favorite of the FANG stocks: Netflix.
Netflix has robust forecasted earnings and sales growth. In fact, analysts are currently expecting 29.8% annual sales growth and 166.7% annual earnings growth in the most-recent quarter.
In addition, Netflix continues to further expand its reach. Last week, the company revealed it will create a Canadian division. It also plans to invest C$500 million, or $401 million, to produce original shows in Canada over the next five years. These productions will be available in English, as well as French. This investment is on top of the $6 billion that Netflix is spending on programming in Canada this year, too.
Put it all together, and it’s easy to see why Netflix is the only FANG stock currently maintaining an A-rating in my Portfolio Grader tool. It’s continuously separating itself from the rest of the FANG pack. And that’s why it’s my favorite of these four tech giants right now.
That’s all for today. I urge you to tune back in here tomorrow when I’ll reveal another one of my favorite stocks.