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Tumult in FAANG stocks is now probably the hottest topic of discussion in the investment world. The issue started with the rout in the Facebook stock on Mar 19 on reports of data breaches, but finally spread into the other areas of the tech space (read: 5 Reason Why FANG ETFs Lost Their Charm in March).
To make matters worse, the failure of NVIDIA’s self-driving car tests, short selling pressure on Twitter on reports of stricter social-media regulations, overvaluation in Netflix (NFLX - Free Report) and Trump’s attack on Amazon (AMZN - Free Report) over antitrust or competition laws also took the market into a tailspin. There was a bloodbath in the tech space.
The European Commission plans to target Silicon Valley’s tech titans with a renewed tax scheme. The commission proposes to impose tax on sales to access some of the concealed profits that the companies generate in EU states.“The present system of international corporate taxation — levied on declared profits rather than sales — has allowed tech companies to slip the net of a system designed for the pre-digital world,” per Financial Times.
The broader tech ETF Technology Select Sector SPDR ETF (XLK - Free Report) has lost about 5.5% since Mar 19. Below we highlight a few tech ETFs and stocks that stayed afloat in this market rout and performed better than XLK.
ETFs in Focus
ETFMG Prime Cyber Security ETF (HACK - Free Report) – Down 1.3% Since Mar 19
The underlying Prime Cyber Defense Index applies a rules-based investment methodology to pick companies actively involved in the cyber security industry. Commvault Systems, Trend Micro and Science Applicatns Intl Cp New Com hold the top three positions of the fund.
First Trust NASDAQ CEA Cybersecurity ETF (CIBR - Free Report) – Down 2%
The underlying Nasdaq CTA Cybersecurity Index tracks the performance of companies engaged in the cybersecurity segment of the technology and industrials sectors. Palo Alto Networks, Akamai Technologies and Symantec are the three top holdings of the fund (read: What Investors Should Know About the Cybersecurity Industry (Revised)).
BlueStar TA-BIGITech Israel Technology ETF (ITEQ - Free Report) – Down 3.2%
The underlying TASE-BlueStar Israel Global Technology Index considers all Israeli companies operating in a wide array of industries from information technology to biotechnology to clean and sustainable agriculture and energy technology.
Stocks in Focus
Science Applications International Corporation (SAIC - Free Report) – Up 7.7% Since Mar 19
The Zacks Rank #1 (Strong Buy) company is in the technical, engineering and enterprise IT services business. It belongs to a top-ranked Zacks industry (top 25%).
MAM Software Group Inc. – Up 3.2%
The Zacks Rank #2 (Buy) company develops and markets software solutions. It also hails from a top-ranked Zacks industry (top 25%).
Image: Bigstock
3 Tech ETFs & Stocks Unscathed by FAANG Shocks
Tumult in FAANG stocks is now probably the hottest topic of discussion in the investment world. The issue started with the rout in the Facebook stock on Mar 19 on reports of data breaches, but finally spread into the other areas of the tech space (read: 5 Reason Why FANG ETFs Lost Their Charm in March).
To make matters worse, the failure of NVIDIA’s self-driving car tests, short selling pressure on Twitter on reports of stricter social-media regulations, overvaluation in Netflix (NFLX - Free Report) and Trump’s attack on Amazon (AMZN - Free Report) over antitrust or competition laws also took the market into a tailspin. There was a bloodbath in the tech space.
The European Commission plans to target Silicon Valley’s tech titans with a renewed tax scheme. The commission proposes to impose tax on sales to access some of the concealed profits that the companies generate in EU states.“The present system of international corporate taxation — levied on declared profits rather than sales — has allowed tech companies to slip the net of a system designed for the pre-digital world,” per Financial Times.
The broader tech ETF Technology Select Sector SPDR ETF (XLK - Free Report) has lost about 5.5% since Mar 19. Below we highlight a few tech ETFs and stocks that stayed afloat in this market rout and performed better than XLK.
ETFs in Focus
ETFMG Prime Cyber Security ETF (HACK - Free Report) – Down 1.3% Since Mar 19
The underlying Prime Cyber Defense Index applies a rules-based investment methodology to pick companies actively involved in the cyber security industry. Commvault Systems, Trend Micro and Science Applicatns Intl Cp New Com hold the top three positions of the fund.
First Trust NASDAQ CEA Cybersecurity ETF (CIBR - Free Report) – Down 2%
The underlying Nasdaq CTA Cybersecurity Index tracks the performance of companies engaged in the cybersecurity segment of the technology and industrials sectors. Palo Alto Networks, Akamai Technologies and Symantec are the three top holdings of the fund (read: What Investors Should Know About the Cybersecurity Industry (Revised)).
BlueStar TA-BIGITech Israel Technology ETF (ITEQ - Free Report) – Down 3.2%
The underlying TASE-BlueStar Israel Global Technology Index considers all Israeli companies operating in a wide array of industries from information technology to biotechnology to clean and sustainable agriculture and energy technology.
Stocks in Focus
Science Applications International Corporation (SAIC - Free Report) – Up 7.7% Since Mar 19
The Zacks Rank #1 (Strong Buy) company is in the technical, engineering and enterprise IT services business. It belongs to a top-ranked Zacks industry (top 25%).
MAM Software Group Inc. – Up 3.2%
The Zacks Rank #2 (Buy) company develops and markets software solutions. It also hails from a top-ranked Zacks industry (top 25%).
SK Telecom Co. Ltd. (SKM - Free Report) – Up 1.5%
The Zacks Rank #1 company is the world's first commercial CDMA digital cellular service. It also hails from a top-ranked Zacks industry (top 19%).
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