Displaying items by tag: fangs
Why Tech is Still the Top Sector
(San Francisco)
Where should investors put their money in the stock market? That has been a very tough question lately, as everyone’s favorite darling, tech, has had a rough several weeks, and the outlook still seems dicey. However, Credit Suisse says that despite its woes, tech is still the best sector to be in at the moment. The reason why? Fundamentals. Tech has great underlying business momentum, with strong revenue, great growth, and strong free-cash-flow valuations.
FINSUM: We think regulation of tech is still some distance away, which mean it should have a good medium term runway to keep outperforming. All of that means the lower valuations right now could prove a good opportunity.
It’s Not as Bad as it Looks for Tech
(San Francisco)
Tech has been doing very poorly lately. Between the heat on Facebook and the growing threat of regulation to Amazon and other big tech companies, things look bleak. However, they may not be as bad as they seem. The reason why is two-fold. Firstly, many experts think any tech regulation won’t be hugely disruptive to the industry. Secondly, the underlying businesses look strong and the worries about regulation have not really dented earnings expectations. All of this leads many to believe that the whole selloff is overdone and things will blow over.
FINSUM: We can’t see any major tech regulations coming out that would really dent the industry, so all else equal, we do think the selloff might be overdone.
Facebook May Start a Dividend
(San Francisco)
While they are far from young or immature businesses, so-called FNAG stocks have all stuck to the current entrepreneurial mantra of not paying a dividend. That may be about to change as Facebook may soon be compelled to start issuing one. The company has 2 bn users and is reaching the limits of its growth potential. If headline growth starts to slow, which it almost inevitably will, expect investors to start demanding dividends and buybacks. Non FANG, but closely related stocks, such as Apple, Microsoft, and Intel, are all paying or raising dividends.
FINSUM: Dividends and buybacks would be a very positive driver for Facebook’s stock price, especially if they started before growth began to wane.