Are the FANG Stocks Still What They Used to Be?

Back in 2017, Facebook, Inc. (FB), Amazon.com, Inc. (AMZN), Netflix, Inc. (NFLX) and Google (GOOGL) were Wall Street darlings, so much so that they were dubbed the “FANG” stocks. By yearend, FB, AMZN and NFLX had gained more than 50%, with GOOGL climbing 33%.

These were the giants of the tech industry.

However, 2018 wasn’t as good to them. Amazon and Netflix closed 2018 on a high note, gaining 28% and 40%, respectively, but both Facebook and Google didn’t do nearly as well. In fact, Facebook lost 25% and Google closed down about flat.

2019 hasn’t been too rough on the stocks. From the start of January, all the FANG stocks are up in the double digits, but they’re not performing nearly as strongly as they did two years ago.

But now that the companies’ second-quarter earnings reports have all been released, it’s time for us to review them. You can see a snapshot of each below.

Facebook:

  • Reported Q2 results on July 24, 2019.
  • Earnings per share of $1.99 were up 14% year-over-year, and topped analysts’ expectations for $1.90. This represents a 4.7% earnings surprise.
  • Revenue of $16.9 billion rose 27.6% year-over-year.
  • The stock fell about 3% the next day.


Amazon:

  • Reported Q2 results on July 25, 2019.
  • Earnings of $5.22 per share fell below analysts’ expectations of $5.57 – a 6.3% earnings miss
  • Total sales jumped 20% year-over-year to $63.4 billion, which topped analysts’ forecasts for $62.5 billion.
  • The stock dipped as much as 2.5% the following day.


Netflix:

  • Reported Q2 results on July 17, 2019.
  • Earnings of $0.60 per share topped the estimated $0.54 – am 11% earnings surprise.
  • The 33% year-over-year increase in revenue to $4.9 billion was in-line with expectations.
  • The stock dropped as much as 12% the day after earnings were announced.


Google:

  • Reported Q2 results on July 25, 2019.
  • Earnings per share of $14.21 topped the consensus estimate for $11.30 – a solid 27.8% earnings surprise.
  • Revenue increased 19% year-over-year to $38.9 billion and beat estimates for $38.15 billion.
  • The stock closed up almost 10% higher the next day.

Clearly, this was a mixed second-quarter earnings season for the FANG stocks. So, let’s see how they  stack up in my Portfolio Grader now that their most-recent results have been calculated in.

The Total Portfolio Grade earns a “C.” This isn’t terrible, but it’s not that great, either.

When investing in a stock market that’s growing narrower, it’s becoming harder to find the crème de la crème of stocks that will report strong earnings and sales and earn my coveted A-rating. But that’s just what I’ve been finding for my Growth Investor subscribers.

In fact, my favorite cybersecurity play reported its quarterly results on Thursday. Earnings and sales both increased by the double digits, and the stock surged 15% higher on Friday.

This is what happens when you invest in companies with strong fundamentals, earnings and sales growth.

While the FANG stocks might not be hot stuff anymore, that doesn’t mean that there aren’t strong tech winners (like my cybersecurity company). You just have to know where to find them.

I believe I have found the next big winners in the 5G and artificial intelligence (AI) spaces. They’re not reporting earnings for another few weeks, so there’s still time for you to sign up now and get all the details. You may have missed out my big cybersecurity play, but it’s not too late for these other two. Click here for all the details. And after you’ve signed up, I’ll send you two reports on the 5G and AI sectors – absolutely free.

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