As tech stocks continue to get hammered investors may want to rethink FAANG (Facebook, Amazon, Apple, Netflix and Google) and consider MANG, according to one strategist.
It’s an acronym coined by Rupal Bhansali Ariel Investments CIO and portfolio manager of international and global equities and author of “Non-Consensus Investing: Being Right When Everyone Else Is Wrong.” In an interview with Yahoo Finance’s On The Move, Bhansali suggested investors consider alternatives to stocks like Netflix (NFLX), which she said have seen better days.
“Netflix is a classic one where a couple of years ago, people thought nothing could touch it. And now you've got multiple people trying to take them on, whether it's just Disney (DIS) or it's Apple (AAPL),” she said.
So what does MANG stand for?
Michelin (MGDDY) gets top spot in the roster and while it’s considered a consumer discretionary it’s actually a staple, argues Bhansali. After all she says, everyone has to replace their tires.
“There is no discretion in that. So you're paying 2x a multiple of consumer discretionary. Twenty times earnings, and 2% yields. You can get Michelin on 10 times earnings and a 4% yield,” she said. “So there is value in the market if you know how to look for it.”
Moving on, she notes that the A can stand for Ahold (AD.AS), a food retailer, or Amdocs (DOX), a telecom billing software company (if you want to invest in something in the U.S.), and the letter N is for Nokia (NOK), which Bhansali called a great play on 5G.
“In the 5G equipment market. It's actually the number two player in the world,” she said. “In fact, there are only two left in the world. And Huawei, as you know, is going to be on its knees. And so Ericsson and Nokia have the 5G arena a lot to themselves.”
The G, according to Bhansali, could stand for Gilead (GILD) or GlaxoSmithKline (GSK), representative of the overall strength of the health care sector.
Looking beyond the standard basket of FAANG stocks and expanding portfolios to include MANG, ”out-of-favor, misunderstood, mispriced securities,” said Bhansali, is the key to making money.
Yvette Killian is a producer for Yahoo Finance’s On The Move.
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