Tuesday, June 19, 2018

What FANG Stock Did Not Break Out... Yet?

Facebook, Amazon, and Netflix all broke out to new highs this year. But there's a G in FANG. Google will most likely be next to break out to new highs. We think there is enough fundamental reason to do it as we'll explain.

About two months ago on April 18th we told you we thought FANG stocks were headed to new highs. We've been bullish, as you know.

FB AMZN NFLX GOOG
Source
Since then Facebook (NASDAQ:FB) hit a new high on June 14th, Amazon (NASDAQ:AMZN) on May 30th on a closing basis and Netflix (NASDAQ:NFLX) on May 23rd.

The last letter in FANG is also about to be last to break out, Google (NASDAQ:GOOG)(NASDAQ:GOOGL).

Fundamentals Driving FANG To New Highs 

Each FANG stock has been seeing accelerating revenue growth.

Here's the numbers.


2017 2017 2018

Q3 Q4 Q1
Google 27772 32323 31146
Rev Growth 23.7% 24.0% 25.8%




Netflix 2.9848 3.2857 3.7010
Rev Growth 30.3% 32.6% 40.4%




Amazon 43744 60453 51042
Rev Growth 33.7% 38.2% 42.9%




FB 10328 12972 11966
Rev Growth 47.3% 47.3% 49.0%

Notice a trend? Each FANG stock is seeing accelerating revenue growth. That drives the earnings model and as you know earnings drive stocks.

As for Google, based on our latest work, we think GDPR hurts smaller publishers and forces advertisers to the safer larger plays like Google. Given potential benefits from the new privacy legislation we think Google has more to go on the upside.


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All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no positions but are looking to enter on weakness each of the stocks above for a customer.

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