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 (FB) , Amazon (AMZN) , Netflix (NFLX) and Google (GOOGL) (now Alphabet) -- 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 this clip 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 (except for Netflix), these names continue to attract money flows. In fact, we see all four names within spitting distance of new all-time highs. FB and GOOGL are holdings of Action Alerts PLUS.
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 three (ex-NFLX) of the top 10 valuations by market cap in the U.S.
Let's take a look and see where each name is sitting. I have attached monthly charts, 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 $20s, and just coming off an embarrassing move under $20. Barron's had just put out a bearish piece saying Facebook was finished, and heading lower. But, to underestimate Mark Zuckerberg and the company's more than 1 billion users was a bad move. Today, the stock is near $136 a share, up almost 500% since we incorporated it in 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 result of the rollout of a host of new services, including AWS and Amazon Prime, the company has become the enemy of bricks-and-mortar retail, as 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 from its all-time high.
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-to-1 stock split), and its business has never been better. The transition to original programming, a digital model and more content has positioned Netflix as the leader in its space -- but more competition is coming from Amazon, Apple (AAPL) and Hulu, among others. AAPL is also an Action Alerts PLUS holding.
Google has been consistent, and is only up about 110% since we profiled the name on "Mad Money." The stock split a couple of years back, so there are two classes of shares. As it creates more ideas for revenue streams, it is a wonder to marvel at in terms of idea flow and revolutionary ways to generate viewers, eyeballs and advertisers. It is clearly the dominant player in its field, with an enormous bench of management and leaders. It is 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% and 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.