- (0:30) – Navigating High Flying Stocks During A Market Self Off
- (5:25) – Are The FANGMAN Stocks Becoming Value Stocks?
- (21:45) – Knowing Your Risk Tolerance: What Fits Into Your Portfolio?
- (30:00) – Episode Roundup: FB, AMZN, NVDA, GOOGL, MSFT, AAPL, NFLX, TSLA
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Welcome to Episode #314 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, she went solo to talk about the FANGMAN stocks: Meta Platforms, Amazon, NVIDIA, Alphabet, Microsoft, Apple and Netflix along with Tesla, which is also now a “sure thing” type stock. They are all down double digits in 2022. They are on sale.
But stocks are the one thing that when they’re on sale, people don’t want to buy them.
And while 2022’s sell-off has been painful for all investors, if you are a long-term investor in these stocks, the pain isn’t quite as bad. After all, Netflix is one of the best performing stocks of the last 10 years. But if you bought Netflix shares over the last year, then you are down big.
What should investors do about the FANGMAN stocks and Tesla, if anything?
Three Choices for Investors in 2022
1. Sell your stocks and move to the sidelines with the cash.
2. Do nothing.
3. Buy more.
Tracey has no crystal ball to know if this is the bottom of this correction. Investors shouldn’t try and time the bottom. Have an investing strategy and stick to it.
But while the FANGMAN stocks are often lumped together, they are very different businesses with their own particular problems and issues in 2022.
Are These 5 Stocks on Sale?
1.
Meta Platforms
FB
Meta Platforms was the first of the FANGMAN stocks to slide after it announced it would be spending a lot of money on the Metaverse and earnings growth would slow.
Meta Platforms is down 41% year-to-date and now trades with a forward P/E of just 17.5. But, it also still has growth, as it has a PEG ratio of just 1.3.
Is Meta Platforms a deal now?
2.
Amazon
AMZN
Amazon shocked the Street in its first quarter report by talking about the slowdown in online consumer spending. Estimates have been slashed to just $10.85 for 2022 from $48.35.
As a result, Amazon shares have actually gotten more expensive, even though they’ve fallen 35%. It now has a forward P/E of 211 and a PEG ratio of 8.
Amazon is a Zacks Rank #5 (Strong Sell) thanks to 9 analysts cutting estimates over the last 30 days. The Zacks Rank is a short-term recommendation, however.
How about for the long-term?
Is this a buying opportunity in Amazon or does it have further to fall?
3.
Alphabet
GOOGL
Alphabet hasn’t been immune to the selling pressures in 2022. Shares have fallen into a bear correction, losing 21% year-to-date.
Alphabet’s valuation has also fallen. It now trades with a forward P/E of 20.5 and a PEG ratio of just 1.1.
Earnings are holding up in 2022 and are expected to rise, but only 0.4%. But with these inflationary pressures, flat earnings growth this year is no small feat.
Is Alphabet the hidden gem among the FANGMAN stocks?
4.
Microsoft
MSFT
Microsoft is another FANGMAN stock which has entered into a bear correction, losing 20% year-to-date.
But Microsoft’s shares remain expensive, with a forward P/E of 29.5 and a PEG ratio of 2.3 as earnings are expected to grow another 16.9% this year.
Is Microsoft going to have to fall further for a bottom to be found in this correction?
5.
Tesla
TSLA
Tesla was one of the best performing stocks of 2020 and 2021. But Tesla shares are down 25% in 2022 and are only up 17% over the last year.
It’s not cheap, even with the sell-off, with a forward P/E of 77 and a PEG ratio of 2.6.
But Tesla is still growing quickly. 2022 earnings are expected to grow 66% to $11.26 from $6.78 last year.
Is this a golden opportunity to get into Tesla?
What Else do you Need to Know About the FANGMAN Stocks and Tesla?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of FB, AMZN, MSFT and GOOGL in her own personal portfolio and is asking the same questions everyone else is: should she sell or buy more?]
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