- (0:30) - Semiconductor Industry Overview
- (3:40) - Is The Tech Cycle Coming To An End?
- (9:45) - What Stocks Should You Be Watching?
- (13:00) - Long Term Risk For Semiconductors
- (17:00) - Why Is Nvidia Such A Power House?
- (25:45) - Episode Roundup: MU, LRCX, AMAT, NVDA, TSM
Welcome to Episode #133 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by Dave Bartosiak, the Editor of Zacks Momentum Trader newsletter and Zacks Momentum Strategist to discuss, what else, the FANG stocks.
FANG stocks are breaking out to new highs again, including those in FANG 2, which in the BMO Fang Index 3x Leverage ETF (FNGU) means Alibaba, Baidu, NVIDIA, Tesla and Twitter.
Is it too late to get in?
Or is there more upside?
Lots of pundits are wringing their hands about valuation and comparing 2018 to 1999-2000, just before the dot-com bust.
Do the FANG Stocks Have Stretched Valuations?
1. Facebook (FB - Free Report) is trading with a forward P/E of 25.3. This is the cheapest its been since its IPO. In that year, in 2012, it had a median forward P/E of 198.
2. Apple (AAPL - Free Report) has been a value stock for years. Just 2 years ago, in 2016, it traded with a forward P/E of just 12. It’s not surprising that that’s when Warren Buffett started to buy. It currently trades with a forward P/E of 16.7, which is its highest in years but is in line with the S&P 500.
3. Amazon (AMZN - Free Report) has never been about a P/E. But Dave points out, that if you look at other valuations, such as the P/S ratio, which is just 4.29, it doesn’t seem overly expensive.
4. Netflix (NFLX - Free Report) has never been “cheap”. Back in 2012, before the Crown, it was trading with a median forward P/E of 2,190. It has a P/E of 125 now. But investors are buying the growth story.
5. Alphabet (GOOGL - Free Report) was cheapest in 2012 when it traded at 17x. Since then, it’s traded in the 20s. It’s current forward P/E of 28 is the most expensive the stock has been on a P/E basis in 6 years.
What about FANG 2?
Tesla is the only FANG or FANG 2 stock to be in the red for the year. It’s down about 10%. Dave and Tracey talk about whether it is a buying opportunity or not.
Should you be in Alibaba or Baidu if a trade war breaks out?
And what’s the story with NVIDIA? Does it still have its mojo?
Find out the answer to all of this and more on this week’s podcast.
[In full disclosure, the author of this article owns shares of FB, GOOGL and AMZN in her personal portfolio.]
More Stock News: This Is Bigger than the iPhone!
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