SIMON BROWN: I’m chatting now with Henry Biddlecombe from Anchor Capital. Henry, I appreciate the early morning time. Faang stocks – Facebook, Amazon, Apple, Netflix and Google – had a rough start, although I’m looking at a chart right now, which shows me year to date, and that shows Apple down 17%, all the way to Netflix down 72%.It depends how I do my chart. If I zoom out to one year, Apple’s actually positive, Google flat and, of course, Netflix still under pressure.
SIMON BROWN: I get you on that, but they’re also not Peloton, where things are very much going backwards. I mean, this is Apple, which is hugely growth-generative. Google, Amazon, even Facebook – they’ve got some challenges with the new Apple security and they’re spending on the metaverse, but these are not sort of newbie startups. These are established brands with giant audiences and proper revenues and profits.
SIMON BROWN: …a lot of when I’m chatting with CEOs around results, I’m actually looking back at 2019, rather than the previous period, to try and almost remove the pandemic. That’s not really fair to do, but it gives me a better sense of perhaps operational more than anything else. SIMON BROWN: Some of them – Netflix is the one that that’s had the absolute horror time – had the huge pull forward during the pandemic, everyone signed up. And of course that starts to fade. They’ve also got Disney Plus suddenly coming to the market and creating some challenges there.But I’m looking at price to earnings. It’s a price-to-earnings in the teens. That doesn’t jump out at me and say ‘expensive’.
Regarding the fundamentals, this is basically the cheapest the stock’s ever been, relative to profits. So if you back the story, and we do, I think this is a great time to go long.