FANGMAN includes seven of the biggest tech companies or tech mega-caps of the world — Meta (Facebook), Amazon, Netflix, Alphabet (Google), Microsoft, Apple and Nvidia.
FANGMAN stocks are high alpha counters, which usually depend on growth and future guidance. These stocks can be a decent bet for investors looking for high returns.
Viram Shah, co-founder & CEO, Vested Finance, said that it is unlikely that these stocks will see the kind of growth they saw last year due to macroeconomic headwinds.
“Evidently, growth will slow down for a while and it would be a mistake to write off these stocks as these companies continue to grow their businesses,” he added.
These stocks usually trade at lofty valuations and higher P/E multiples, which may appear unjustified. In other words, they demand premium valuations, which investors are willing to pay most of the time.
Asheesh Chanda, CEO, Kristal.AI, said that these companies have strong business models and growth prospects. “We are not advising our clients to sell out,” he said.
According to experts, the traction among the Indian investors who put their money in global giants remains sound. However, the momentum has slowed down due to adverse market conditions.
On Vested Finance’s platform, volumes of Apple, Amazon, Microsoft and Netflix have reduced by 28-67 per cent in the last month, whereas Alphabet and Meta have seen a rise of 88 per cent and 29 per cent, respectively.
Shah said that these stocks remain among the top 20 traded stocks on the platform, and investors usually buy the dip. “We have not seen a significant rise in selling, but overall volumes have slowed down due to market conditions,” he added.
“We do not see people liquidating their holdings much, as they still believe in the quality of these stocks,” said Chanda from Kristal AI. “Our investors are not trading with it and have a long-term view on their investments,” he added.
The stretched valuations of these stocks could conjure up fears of a deep correction. The biggest risk faced by these companies is regulatory scrutiny.
Market experts suggested that instead of looking at these stocks as a golden basket, one should look at them individually based on their merit.
These companies have the potential to massively grow their revenues while keeping a check on associated costs, said Shah from Vested Finance.
“Investors with liquidity may buy into these stocks to reap the benefits when the market cycle turns, and we again move into a growth phase,” he said.
Investors should see their risk appetite, liquidity and investment horizon in the near term, experts suggested. The global giants are good quality stocks and have corrected significantly since the peaks they saw last year, they added.
Chanda said that these companies were hit by volatility which is exodus in nature. “Macro-economic events have not put a question on the business models of these companies. However, we do believe that things may get worse still before they get better,” he added.