The FANG stocks (Facebook, Amazon, Netflix and Alphabet i.e. Google) are in the news a lot this year, but the best growth stocks for 2017 have been Chinese Internet stocks.
Although I like the FANG stocks, the problem with them is Amazon and Netflix spend to grow, thus the profits are subdued. Thus, these two stocks have high P/Es and as an investor, its tough to put a valuation on these stocks. With the Chinese Internet stocks you get real reported profits. Thus an analyst can put a fair multiple on these stocks (a P/E ratio) and get a Fair Value. In many cases, the Fair Values are much higher than the current stock prices.
What’s nice about the Chinese Internet stocks is many are growing profits rapidly — and in my book profit growth correlates to stock growth. I’ve been investing in these stocks for more than a decade, and believe I know this sector better than anyone. Here’s six of my favorite names, and leading the list is the most familiar name — Alibaba (BABA).
