About four years ago, Jim Cramer asked me to assist him with the off the charts segment of CNBC's Mad Money. At the time, the market was a getting ready to launch to new heights, and it was clear we needed to look at growth stocks. The names we selected were Facebook, Amazon, Neflix and Google - the poster children of technology and growth. Using the first letters of each name we came up with the acronym, and FANG was born. See the clip below from 2013.
I like to stop in and check how these stocks are doing from time to time. For the most part, these names have held up quite well, and after some poor performance post earnings (exception being Netflix), these names continue to attract money flows. In fact, we see all four names within spitting distance of new all time highs. Where did market players go to during last Wednesday's market surge? You guessed it: the FANG stocks. These leaders tend to move markets more than we could ever imagine. They are 3 of the top 10 valuations in market cap in the US.
Let's take a look and see where each name is sitting. I have attached monthly charts as well to show where these stocks started when Jim and I first presented FANG.
Facebook has been a huge winner since we first profiled FANG in 2013. At the time, the stock was in the mid 20's, just coming off an embarrassing move under 20 bucks. Barron's had just put out a bearish piece saying Facebook was finished, and heading lower. But, to underestimate Mark Zuckerberg and their more than 1 billion users was a bad move. Today, the stock is near 136 a share, nearly up 500% since we brought it to the FANG group. The current chart is constructive as it bases at a higher level. We could see more upside if the economy continues to remain buoyant.
Amazon has been simply amazing, not just the stock but the company. As a rollout of a host of new services including AWS and Amazon Prime, the company has become the enemy of brick/mortar retail, evidence it has crippled the old, traditional retail model. The stock is up more than 200% since we talked about it four years ago, and we still think there are more highs to be made. The stock is less than 2% away.
Netflix was the controversial name when Jim Cramer talked about it in 2013, but it has moved the most of all the FANG stocks. It was the most bullish chart pattern I found among the four names, and for good reason: heavy institutional buying. The stock is up over 750% since the program in 2013 (adjusted for a 7-1 stock split), and their business has never been better. The transition to original programming, digital model and more shows has positioned Netflix as the leader - but more competition is coming from Amazon, Apple and Hulu among others.
Google has been consistent and is only up 110% or so since we profiled the name on Mad Money. The stock split a couple years back so there are two classes of shares. As they create more ideas for revenue streams it is a wonder to marvel at their idea flow, revolutionary ways to generate viewers, eyeballs and advertisers. They are clearly the dominant player in their field with an enormous bench of management and leaders. They are right near a breakout to new highs.
Bottom line, the FANG stocks have been a great place to invest. Since Feb 2013 the composite return of equal weighted positions is up more than 430%, truly an amazing run. In comparison, the SPX 500 is up about 55% while the Nasdaq 100 composite is higher by about 80%. With some renewed vigor and interest in the stock market, I suspect money will be flowing to some of the more 'certain' names, the high quality ones like FANG, which are bound to beat the market return.