FAANG stocks…
Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google (GOOGL) – for the last few years – these stocks seemed to be untouchable.
Each are dominating their respective areas of the digital world…
So, for a few years now, these juggernauts have been some of the most prominent names on both the internet and Wall Street – giving some investors the chance to make a LOT of money.
However, one of these stocks may have just revealed a chink in its proverbial armor, and…
That weak link may not be the stock you think it is.
Now, before we get into which of these stocks could find itself hurting soon…
Let’s talk about the run these stocks have had.
If you look at their charts – they look like what Lewis and Clarke saw as they approached the continental divide.
These stocks have performed incredibly over the past decade – and if you were smart enough to get in early…
You’ve been killing it – so, congratulations.
When you compare their performance to the rest of the market’s…
It’s not even a contest, as these companies have all become top performers – outpacing the indices as if they were standing still.
The only problem with these stocks?
For those that didn’t get in early enough, the stock prices may have never really seemed to drop down low enough to where it made fiscal sense to buy one or more of them.
However, this was almost a NON-problem – as it seemed that whatever price you bought any one of these companies at – you’d always make money.
So, the real problem was for the everyday investor to find the funds to buy the stocks in significant amounts.
Not a bad problem to have, right?
Well, that may all be about to change – as one of these companies just revealed that things might not be as rosy as we once thought.
So…
Which company may have some future struggles on the horizon?
Well, if you guessed Apple and its lagging iPhone sales – you made a good guess – as the iPhone’s popularity has started waning over the past couple of years.
A good guess… but a wrong guess.
You may have guessed Facebook or Google for the government inquiries that these tow companies have had to and are STILL having to endure.
Another good guess, but you’d be wrong.
You might be thinking, “Well, it can’t be Amazon or Netflix… they’re KILLING it!”
Well, they are – but for one of these companies – things are about to change.
So which one?
Well, it’s not Bezos’ baby… it’s Netflix.
What’s going on with Netflix?
Well… nothing. Netflix is doing just fine. That’s not the problem.
The problem is – its starting to get some REAL competition from other major companies out there.
Netflix is a victim of its own success…
Its business model is being copied by companies that have MAJOR money and they are following Netflix’s lead by creating original content and only making it available on their networks.
Disney (DIS), Apple, and others are breaking into the content streaming industry and they’re not coming in politely…
They’re kicking the door down and trying to claim Netflix’s territory as their own.
How bad is it?
Well, Netflix CEO, Reed Hastings said recently, “While we’ve been competing with many people in the last decade, it’s a whole new world starting in November. It’ll be tough competition. Direct-to-consumer [viewers] will have a lot of choice.”
These comments go against the CEO’s previous attitude, which was that there are really no losers in the game and the industry can have many winners.
Investors know this…
Which may be why the stock dropped roughly 10% over the past week.
Now, the good news is, the stock has already made up some of that lost ground…
And there are some analysts that still see NFLX as a $450 stock.
Now, with the CEO’s latest comments in mind – that price may seem a bit lofty… But hey, it’s Wall Street and anything can happen.
That said, if you’ve owned the stock for years and are sitting on unrealized gains, it may seem like a good time to take some chips off the table…
Or maybe you’re hoping for a drop to either begin a new position, or add to an existing position….
In either case, my advice is to be cautious and see what happens before pulling either the buy OR sell trigger. If you don’t have a game plan already in place, it’s time to come up with one.
It makes me happy to know that GorillaTrades’ subscribers don’t have to worry about that kind of thing.
They simply wait for the email from us and follow our lead.
It makes investing so much easier when you have a plan for every single trade…
You may want to consider becoming a subscriber yourself – give your brain a break for a while and let us do the heavy lifting.
Or, you can do what you’ve always done and get the same results…
The ball is in your court!
Regardless, I’d exercise some caution as to what to do with NFLX…
You’ll know what the smart choice is soon enough.
“It is not the strongest or the most intelligent who will survive but those who can best manage change.” ― Leon C. Megginson
