Thursday 26 November 2015

FANG stocks carrying the market

Do you know which are the companies that have revived US market after August?
Four technology giants have contributed with the remarkable $ 440 billion in market capitalization since January 2015.
Let’s see who they are at Visual Capitalist’s chart!


In the sixth year of the bull run, the U.S. large cap market has had its ups and downs. The S&P 500 peaked at 2134.7 in the early summer months, and promptly collapsed to 1867 points during the August flash crash.Today, it’s back in black, but only trading just over 1% higher than it started the year.
The only reason that has made this possible is the legendary performance of four tech stocks:
Facebook, Amazon, Netflix, and Google (now called “Alphabet Inc.”). Together, the “FANG” stocks have created an impressive $440 billion in market capitalization since January.
For comparisons sake: that’s over 2/3 the size of Apple’s current market cap.

The FANG stocks comprised just over 3.5% of the weight of the S&P 500 index at the beginning of the year, and now they make up 5.1%. They’ve carried the market, and without them the S&P 500 would surely be in negative territory today.

Looking at these companies individually, probably Amazon (AMZN) has been the most impressive over the course of the year. While it didn’t shoot up the 143% that Netflix (NFLX) did, Amazon had a similar performance despite being over 6x the size of Netflix. Amazon is now bigger than Facebook in terms of market cap, and achieved a gain of 116% through the year.
The only problem is that it is now the most expensive stock on the index, at a seemingly ludicrous P/E ratio of 966. The other stocks are expensive as well:Netflix and Facebook are trading at 329 and 108 times earnings respectively.Google is the lone palatable company from that perspective, trading at only 35times earnings.
How long FANG will keep this highest level?

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