Home » Economy » Facebook, Amazon and Co. – Which "FANG" shares can investors now strike? | News

Facebook, Amazon and Co. – Which "FANG" shares can investors now strike? | News

Tuesday, August 29th, 2017 | Economy

They are a symbol and gauge for the growth of the technology sector and have driven the US stock market significantly over the last two years. If they are under pressure to sell, investors are afraid of a stock market storm. Then investors remember the rise and fall in the dotcom bubble in 2000.
The speech is from the FANG shares. The acronym stands for the US company Facebook, Amazon, Netflix and Alphabet, the parent company of Google. They all grew enormously in a relatively short time, which also manifested itself on the stock market with a strong rise. However, the stock market exchanges also praise considerable growth fantasies. Dividends are not yet paid by any of these companies.
Since the end of July 2017, the share prices of these companies have seen some of the worms, as can be seen, for example, in the Amazon stock. The stock currently has a bear market, which has not been apparent since last autumn.

Development of the Amazon stock in the last 52 weeks, source: cash.ch
Although Amazon still shows a good performance of 26 percent this year, the last month is a minus 10 percent disappointing. The other FANG shares are similar (see table below). Does the correction offer an entry opportunity, or does an even deeper case threaten?
So much front-end: With Alphabet urgently an investment on, while the Netflix titles are subject to crash.
Facebook – the analyst favorite
In May 2012, Facebook went to the price of $ 38 a share. Two months later the title was not even half as much value. The stock exchanges were already regarded by many as a big mistake. However, starting in July 2013, the stock started flying high. From then until today the price has almost seven times increased – currently the stock costs 167 dollars. Facebook has managed to generate money through advertising from the free social network. And with neat acquisitions the user numbers could be successively increased in the past years: Thus the digital Fotodienst Instagram and the Messenger service WhatsApp belong to Facebook.
In the future, the advertising revenues are also likely to continue to spur. With over 2 billion Facebook users worldwide, the Group has the necessary base. The title is the analyst favorite among the FANG values. 93 percent of the analysts recommend buying. With a price-earnings ratio (P / E) 2017 of 32 the title seems expensive, but not massively overpriced. The setback of 3 percent last month was roughly the same as the overall market. Investors can continue to place on Facebook titles.
Amazon Review by Donald Trump
As seen in the beginning, Amazon's stock fell sharply in the last month with minus 10 per cent. The online retailer could not convince investors in the second quarter with a profit margin of more than three quarters to 197 million dollars. The collapse of the stock took place immediately after a new record high of 1083 dollars.
Amazon chief and founder Jeff Bezos is famous and notorious for spending a lot of money on new business – at the expense of profit. At present, many funds are being invested in the acquired organic supermarket chain Whole Foods Market, in order to expand the online business with fresh food. No less than US President Donald Trump interfered in a tweet at Amazon's new focus:
Amazon is doing great damage to tax paying retailers. Towns, cities and states, the U.S. Are being hurt –
– Donald J. Trump (@realDonaldTrump) August 16, 2017
"Amazon is a big hit on tax-paying retailers, and small cities, cities and states all over the US suffer from it – many jobs are lost," the president said on Twitter. The US trade giant Walmart last week also announced a shoulder closure with Google (cash reported). The online market for food will therefore be highly competitive in the future. A purchase of the Amazon stock is therefore not necessarily necessary. Especially the stock with an estimated P / E ratio of 244 in 244 despite correction is still extremely expensive. The past has shown that corrections at Amazon can be even more marked than the current one.
Netflix – Disney outlet and growing competition
The success of the online streaming service Netflix depends on the number of subscribers. And these are developing quite well: Netflix currently has a total of 104 million customers worldwide. By the end of the current quarter, it should be 108.35 million. Nevertheless, last year the share suffered the strongest downturn of all FANG stocks at minus 13 percent.
The drop in prices is due to the surprising news that Disney is about to cancel the existing exclusive contract with Netflix 2019 and will set up its own online streaming service. Netflix is ​​also already struggling with enough competition: In the US, the company Amazon, Apple and HBO are disputing the market. Since the IPO in May 2002, the Netflix share – at that time still focusing on the shipping of DVDs – has increased its value by 147 times. With a current P / E ratio 2017 of an estimated 287, the stock is still massively overpriced despite the correction. It is quite possible that the downtrend will continue.
Alphabet – well positioned in future industries
Three months ago, Alphabet and Amazon were racing around the brand of $ 1000 per share – which Amazon decided to buy. In the second quarter, the alphabet has suffered a sharp decline in profits, mainly due to the EU Commission's billion-dollar penalization due to the illegal exploitation of the market power of product advertisements in search results. But also the advertising business of the search engine Google, the most important source of income of alphabet, shows certain weaknesses.
But this is whining at a high level, after all, the alphabet is still excellent. Google is undisputedly the number one among the search engines, in addition, the Mega Group in many other areas at the front. For instance, the online video portal Youtube, which belongs to Alphabet, continues to bring succulent advertising revenues. It is also invested selectively in promising future sectors: self-propelled cars, virtual reality, life-prolonging drugs or Google Cloud are topics that will concern us in the coming decades. A stock that could give investors a lot of pleasure.
Price development and valuation of the FANG shares
Share price, 1 month
Share price since 1.1.17
KGV 2017 *
Buy recommendations **
+ 45%
+ 26%
+ 34%
Google (alphabet)
+ 17%
+ 20%

* Estimated price / profit ratio in 2017, ** Ratio of purchase recommendations to all available analyst ratings
Sources: cash.ch and nasdaq.com


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