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The Jefferies analysts emphasized the MANG Group as a preferable choice over FAANG. MANG represents Microsoft, Apple, Nvidia, and Alphabet.
Analysts at Jefferies have advised that investors steer clear of FAANG + Microsoft stocks and instead embrace MANG. Notably, the FAANG Group consists of Facebook parent company Meta Platforms (NASDAQ: FB), Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN), Netflix Inc (NASDAQ: NFLX), and Google‘s parent company Alphabet Inc (NASDAQ: GOOGL). These leading companies and Microsoft Corporation (NASDAQ: MSFT) have been investors’ choices over the past years, yielding gains. Besides being listed on NASDAQ, FAANG and Microsoft have been leading the US tech stocks.
Despite having a great influence on the bull cycle for tech stocks in the US for some time, the companies are beginning to see downturns. Facebook has lost nearly 37% this year, and Apple has shed over 10% in the same period. In their year-to-date record, Amazon has plunged over 25%, Netflix down 66.82%, and Alphabet has dropped 18.35%. In addition, Microsoft has lost over 16% since the year started.
MANG vs FAANG
Led by Sean Darby, the Jefferies analysts emphasized the MANG Group as a preferable choice over FAANG. MANG represents Microsoft, Apple, Nvidia Corporation (NASDAQ: NVDA), and Alphabet. Darby added that FAANG + Microsoft “is not a homogenous group.” In his opinion, the MANG group is the better choice due to “their balance sheet, earnings yield and FCF [free cash flow] yield.”
The Federal Open Market Committee had a two-day policy meeting on the 3rd and 4th of May. Following the meeting, the Federal Reserve will expectedly raise the federal funds by 50 basis points. The increase equals a range of 0.75% to 1.25%. Additionally, the Federal Reserve intends to reduce its bonds holdings. Darby pointed out that the key is “patience.”
Between January and April 2022, FAANG + Microsoft group lost 22% to $2.21 trillion in their market valuation. In April alone, the group dropped $1.4 million in market value. Meanwhile, the MANG Group reported a 14% loss in April and an 18% decline for the first four months of 2022.
Darby is uncertain of the best time to reconsider Meta, Amazon, and Netflix. He wrote:
“[We] are holding off for now on the economy slowing down sufficiently to look at acquiring 10-year Treasury equity proxies.”
In February, the FAANG coinage was changed to AAA, representing Amazon Alphabet and Apple and now MANG is in play. During the time of the announcement, the stocks, except Alphabet and Apple, were performing poorly. While Meta lost a lot of investors largely due to its inadequate interface, Netflix struggled with strong competitors like HBO Max, Disney+, and more.
At writing, Meta Platforms stock is up 0.19% at premarket trading, Apple shares also added 0.23%, and Amazon stock climbed 0.20%. In addition, Alphabet shares are up 0.26% to $2,368.63. However, Netflix stock is down 1.12%.