The term FANG refers to the stocks Facebook (FB), Amazon (AMZN) , Netflix (NFLX) and Google — or what is now called Alphabet (GOOGL). These four names are up an average of 38% so far in 2017. These great gains have attracted a bunch of investors — as well as people who believe the stocks are overvalued and could come crashing down.
So let’s take a look at the FANG stocks and see if they are still good stocks to buy or if it time to sell.
AMZN and NFLX are spending to grow, thus they can’t be fairly valued with a P/E ratio. The other stocks — including Apple (AAPL) to make FAANG — have an average P/E of just 26. All five stocks have an average Est. LTG of 35% a year.
The S&P 500 has a P/E of 19 yet has grown profits only 5% a year the last decade. At 1st glance I’d rather pay 26x earnings for 35% growth than 9x earnings for 5% growth. But let’s take a closer look at FANG and see if its time to buy, sell or hold.
