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January 8th, 2018 | Kiplinger's Personal Finance

The “FAANG” Stocks: Gerstein Fisher Advises Some Caution

The “FAANG” stocks—Facebook, Amazon, Apple, Netflix, and Google (parent Alphabet)—are up a stunning 41.6% annualized on average over the past five years. Too pricey to buy? In this article from Kiplinger’s Personal Finance, Gregg Fisher, Gerstein Fisher founder and head, points to concentration risk in Google’s revenue stream which is heavily dependent on advertising. And risk isn’t confined to Google. The average P/E ratio of the FAANGs is at a frothy 69x—three-and-a-half times the S&P 500’s, and Netflix faces “ferocious” competition. But the FAANG story is more nuanced. Apple, for example, continues to run a solid business with a loyal customer base, and it trades at a P/E below the market’s. The article, “FAANG Stocks: Buy, Sell or Hold,” reveals Kiplinger’s investment recommendation for each of these current market darlings. “We do think investors should approach the stocks with caution,” counsels the article, but the advice it offers is hardly uniform for the group.

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