Market Overview

A Look At The Dow And FANG Stocks In 2019

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A Look At The Dow And FANG Stocks In 2019

Legacy "blast from the past" stocks including Cisco Systems, Inc. (NASDAQ: CSCO) and IBM (NYSE: IBM) are among the Dow's top performers so far in 2019, CNBC's Mike Santoli said on a recent "Trading Nation" segment.

Are any of these names a compelling buy at today's levels? 

Cisco Stands Out

Among the 30 Dow Jones stocks, many are up a similar 40 percent from late last year's lows and up around 25 percent since the start of 2019, Instinet chief market technician Frank Cappelleri told Santoli.

Cisco stands out, as it is the only stock recording multiyear highs, he said. If the tech company adds another 5 percentage points to its 2019 gains, it will mark the best yearly performance in a decade.

Cisco's stock looks poised to take a "breather," as the outperformance looks "a little bit too much, too soon," Cappelleri said.

Any near-term weakness should be bought by investors, as the longer-term picture remains positive, he said. 

Related Link: Analysts Say Cisco Has Limited Upside Following Earnings Beat

IBM's Dividend

IBM's business isn't expected to "rocket" higher, but the recent acquisition of Red Hat represents a "positive going forward," said Boris Schlossberg, managing director of FX strategy at BK Asset Management.

IBM's stock boasts a 4.5-percent dividend yield, which will "attract some value plays," he said on "Trading Nation." 

IBM's dividend yield is also more than double the S&P 500's 2-percent average and attractive compared to the 2.5-percent yield on a 10-year note, Schlossberg said. 

"IBM, the old reliable, at this point looks very good to me." 

What About The FANGs?

Old-school legacy Dow stocks are up nicely in 2019, but FANG stocks are outperforming so far in 2019.

Among the group of internet-focused companies, Amazon.com, Inc. (NASDAQ: AMZN) offers a unique proposition in a low-growth environment: safety.

Strategic Wealth Partners President and CEO Mark Tepper said on a separate "Trading Nation" segment that Amazon offers the fastest rate of growth among the FANG stocks.

Investors tend to "flock toward companies and industries" that offer better growth rates compared to the S&P 500 index, and there is "no question" this is happening now, Tepper said. 

Amazon's stock is trading around 10-percent removed from its all-time highs, while the S&P 500 index is around 2-percent shy of its all-time highs, the CEO said.

In Tepper's view, this can't be justified, as Amazon boasts an attractive "profit tailwind" from new initiatives like advertising.

Amazon can steal market share in advertising away from fellow FANG peers Facebook, Inc. (NASDAQ: FB) and Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), he said. 

Related Link: Cowen Dives Into Amazon's Home Business, E-Commerce, Advertising Ecosystem

Posted-In: Boris Schlossberg CNBC Dow Jones FANG Frank Cappelleri Mark TepperTech Media Best of Benzinga

 

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