FANG stocks -- Facebook ( FB) , Amazon ( AMZN) , Netflix ( NFLX) and Alphabet's Google ( GOOGL) ) have had an incredible run since Jim Cramer and I first talked about them in 2013. The rise in these names have been legendary, but more importantly, gave importance to new trends in technology. We never thought this would play out, but to to be sure, Jim Cramer made the difference -- he spread the word.
Today everyone knows FANG. They're talked about nearly daily in the business media -- and there are even exchange-traded funds named after FANG.
While many try to find the next FANG with some new names that conquer the next market obstacle, the current names are often neglected, beaten up, ridiculed or just left for dead. For years we've heard that "Netflix is done," or "Facebook will be destroyed," or the "competition with eat up Amazon," or "Google will fall to regulation."
Every year we hear the same thing, and every year investors bid up these stocks like they are going out of style.
These points do matter, as stocks tend to rise up and reach levels of maturity -- like the four horsemen of old, Microsoft ( MSFT) , Intel ( INTC) , Cisco Systems ( CSCO) and Oracle ( ORCL) . These thoroughbreds had been put out to pasture when the dot.com bubble burst just about 20 years ago.
While some like Microsoft have reinvented themselves and become 21st ready, the others like Oracle seem to be lapped by the competition.
They said "new blood" would take over the reins. It's happened in most cases, and the FANG stocks will need to make adjustments, or they will lose share, lose ground and become an old, stodgy company like high growth companies of yesteryear -- think Cisco and IBM ( IBM) .
Are the FANG stocks heading toward the same dismal fate? If 2019 is any indication, the answer is, no.
All four stocks are higher for the year, with Facebook leading the way up 41%. Even with regulatory overhang issues, this stock continues to impress and report great metrics each quarter. Google is next up 25%, the search company is the king of innovation and sports a premium multiple, but is growing the top- and bottom-line better than before.
Amazon is next, up only 12% for 2019, but it was much higher prior to the last earnings report. At one time Amazon was valued at over a billion dollars, the company is still investing and growing its footprint. Finally, there is Netflix, by far the biggest winner of the group since 2013, but one that has faltered in 2019 amid strong competition and pricing concerns. Netflix is near flat for the year, but earlier was up 25%. This one will need to re-charge its batteries in a fiercely competitive streaming space.
So, yes, the FANG stocks are still relevant. They are ready for 2020, and looking for higher prices. It may not be like the days of old, but these solid companies should weather any storm the markets may encounter.
(AMZN, FB, GOOGL, MSFT and CSCO are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells them? Learn more now.)
