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Opinion: Wall Street going gaga for FAANG

Eyes & Ears

Posted online

One of my favorite office visits is when the company’s 401(k) administrator comes each year to address the stock market and economic conditions.

For the last several years, it’s been Terry Conner of Financial Engines Inc., and The Mutual Fund Store LLC before that.

Conner’s recent visit illuminated the FAANG stocks. That’s Wall Street slang for the market’s five best-performing and most-popular stocks. The acronym is for Facebook, Apple, Amazon, Netflix and Google.

Jim Cramer of CNBC coined the term as FANG, according to Investopedia, but investors and analysts have since welcomed Google’s parent company, Alphabet Inc. (NYSE: GOOG).

The biggest eye-opener among the FAANG stocks is what’s happening with Apple Inc. (Nasdaq: AAPL). Analysts project the company will be the first to reach a valuation of $1 trillion. That sounds a little like crazy talk, but it’s current market capitalization is $951.7 billion. Apple shares are trading in the low $190s. Side note: Apple’s per share price is lower than locally based O’Reilly Automotive Inc. (Nasdaq: ORLY), which currently is trading above $280. O’Reilly Auto’s market cap is $23.2 billion, but Apple’s average volume is 30.46 million, compared with O’Reilly’s 844,928 average trading volume. Huge difference.

Conner says such growth stocks – you can also throw in Johnson & Johnson (NYSE: JNJ), Alibaba Group (NYSE: BABA), Expedia Group (Nasdaq: EXPE) and plenty of others – have been leading value stocks for over eight years. And it’s been by a wide margin: 5 percent or more. Typically, he says one or the other leads by 2 percent-3 percent.

“We’re seeing a world tilted toward new innovations,” Conner says.

If you’re wondering where YouTube is among the FAANGs, it’s owned by Google parent Alphabet. It’s one of the most innovative media companies, and a financial analyst on CNBC’s “Squawk on the Street” last year said if it was a stock, it’d be worth at least $75 billion.

There is some caution being thrown at the FAANG stocks. Like all stocks, they go through trading slumps, too.

An eight-year run is pretty strong, but look out for value stocks – those trading at undervalued prices based on other performance measures such as earnings and sales. It might be time for them to take their share.

Greetings from …
A mural new to Springfield is up on the west side of the Discovery Center building downtown. It says, “Greetings from Springfield, Missouri.”

This kind of mural is nothing new, and there’s even more history behind the phrasing now painted prominently on bricks in cities coast to coast. You probably remember the “Greetings from …” postcards. They were popularized in the 1930s and ‘40s. I remember seeing the postcards as a kid in the tourist shops on our family vacations.

The recent trend is captured by two New York artists, who in 2015 hit the road in an RV on a mission to paint in every state. Victor Ving and Lisa Beggs called it the Greetings Tour, and they’ve complete 30 murals in 15 states, according to the website they created.

The mural at Discovery Center was painted by a Springfield-area artist named Andrea Ehrhardt. It’s mostly done – except for the final, and most important, step. The large, block letters spelling out “Springfield” are empty inside. Ehrhardt and the Discovery Center officials who welcomed the mural idea on their building say the content for the letters is being selected. They’re also accepting donations and sponsorships to cover the cost of the project.

Here’s my take on what should go inside Springfield’s letters to illustrate the local history, industry and culture:

S: A big fish, preferably a bass. P: A dish of cashew chicken. R: A vintage car driving down Route 66. I: The skyline, err, Hammons Tower. N: The Wonders of Wildlife building. G: Headshots of Brad Pitt, Bob Barker, Kathleen Turner and John Goodman. F: Logos of the multiple universities: Missouri State, Drury, Evangel and Ozarks Technical Community College. I: The Jefferson Avenue footbridge and railroad imagery. E: CoxHealth and Mercy hospitals. L: Scenery of the James River. D: Corporate logos of O’Reilly Automotive, Bass Pro Shops, Springfield ReManufacturing Corp. and BKD.

What else you got?

Springfield Business Journal Editorial Director Eric Olson can be reached at eolson@sbj.net.

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Bill Smillie

American National Property and Casualty Insurance Company (ANPAC)

Parks-Cooper Park

Busch Building

Monday, June 11
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