Saturday, August 5, 2017

FAANG




To many, FAANG stocks define the market. To me, a conservative investor, it is not. For market-cap ETFs such as SPY, FAANG has more weights than other stocks. As a group, FAANG has been very profitable for the last year. To me they seem to be risky today. The following tables summarize them and I’ll check them one year later (or after September, the worst month of the year) to confirm my findings. It is also a case of momentum vs. value.

All the info are available free in web sites such as finviz.com. All data are based on 8/5/2017. They are for info only and I’m not liable for any errors.

Stocks
Current Price
Gain in a year
FB
169.62
36%
AMZN
173.85
30%
AAPL
156.39
48%
NFLX
180.27
93%
GOOGL
945.79
19%
  Avg.1

45%
  Beat SPY by

216%2



SPY (for comparison)
247.41
14%

1 All averages in this article are estimates.
2 Beat = (45% - 14%) /14%. Similar to other calculations for “Beat”.

Fundamentals

Stocks
P/E
P/E
Forw
P/S
P/B
Debt/
Eq.
Sales
Q/Q
EPS
Q/Q
ROE
FB
37
26
15
7
0.00
45
69
23
AMZN
16
14
6
4
1.11
2
18
27
AAPL
18
15
4
6
0.73
5
10
35
NFLX
221
90
8
25
1.55
32
58
13
GOOGL
34
24
7
4
0.03
21
-28
14
   Avg.
65
34
8
9
0.68
21
25
22
 Beat SPY 1
164%

277%
186%




SPY2
25

2
3














1 Very rough estimates.
2 Most fundamental metrics are from other source than finviz.com, so there may be small discrepancy.

Technical

Stocks
SMA50%
SMA200%
RSI(14)
52-week height
Short%
Insider
Trans.
FB
8%
23%
67
-3%
1%
-86%
AMZN1
35%
8%
51
-6%
1%
0%
AAPL
5%
17%
63
-2%
1%
-31%
NFLX
10%
26%
59
-6%
6%
-69%
GOOGL2
-2%
8%
41
-6%
0%
0%
   Avg.
11%
16%
56
-5%
2%
-37%
  Beat 3  SPY by
1020%
173%
-9%



SPY
1%
6%
62
0%




1 Recent double top. Bearish.
2 Multiple top.
3 Very rough estimates.

The two SMA (Simple Moving Average) technical metrics are positive.

Summary

As a group, FAANG is fundamentally unsound but technically sound compared to SPY. I said the same on the market.  As suggested, use trailing stops if you own any of these stocks. When they turn to be technically unsound, this is the time to exit. They could stay in the current valuations for a long time. However, when the institution investors are dumping them, they will fall very fast and steep. SMA-20% would be another indicator for exit. One’s opinion.


Afterthought


The above is written by a human being in 2017. You can see how easy for the robot to gather this info, analyze the data, confirm the results (using the historical database) and trade the stocks without any human interactions. 
Stock analysts, your professional days are numbered.

NFLX is the most fundamentally unsound. Will check its performance in one year.

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This article is written for my book Profit from 2017 Market Crash.
 

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