FANG, MICA or Others – Which One Is Your Pick Of The Day?

Following a fall of 0.7 percent in the prior month, ANZ Australian Job Advertisements increased 0.2 percent in October. On yearly basis, growth slowed to 3.6 per cent in October which is the slowest annual growth in ANZ Australian job ads since April 2015. Job ads fell by 0.2 percent month on month for the fifth consecutive month in trend terms, while year on year to October Job ads grew 3.8 percent in trend terms also the weakest result since April 2015. David Plank, ANZ's head of Australian Economics, says it is pleasing to see a lift in ANZ Job Ads in October after a couple of weak months.

In a note released by Sydney-based Jevons Global Opportunities, suggesting the FANG stocks (Facebook, Amazon, Netflix and Google of Alphabet Inc.) might be getting little old and investors should turn their heads to MICA (Microsoft, Intel, Cisco and Apple). Kingsley Jones, an analyst writes ’The FANGs are disruptive stocks sometimes thrown in for good measure. Even MICA might be an Old Tech, but these stock show attractively priced growth dynamics.’ Â

Ahead of the tech bubble burst of 2000, he also refers back to the Four Horsemen of 2000, Microsoft, Cisco, Intel, and Dell, which were favored by institutional investors. Many investors felt safe in the knowledge that the companies had robust revenue growth and high margins, and they were widely held although the stocks were not the hottest names of that period. Valuation was the only problem with the story.

What proved to be reasonable in the wash-up of the succeeding bear-market, theme investors simply pushed the stocks to valuations. The FANGs now have labour cost pressures, traffic acquisitions costs, rising regulatory costs and content creation costs that will pressure their profit margins. A MICA exposure offers better risk reward than a FANG exposure when the valuation metrics and technology capex trends are accounted for as perceived by Dr. Jones.

In what could prove a timely fill-up for the supermarket's, Coles is suing the tax office in an attempt to claw back $40 million it paid in fuel excise for the supermarket's coffers during its first year as an independent company. As its bottom line felt the effects of higher costs for customer compensation and bank wholesale funding, Westpac delivered a full-year profit of $8.06 billion which was only a little changed from last year.

Woodside Petroleum is down 1.7 percent to $33.60 and BHP Billiton is down 0.6 percent to $33.29. Xero is up 1.4 percent to $41.59 while Macquarie Group is up 1.6 percent to $124.31. Damages of $US268 million have been awarded against Cochlear which has lost a case in the United States, where it is being sued. On opening to $172.41, Cochlear shares dropped 4 per cent, or $7.15, but are recovering and are now down $3.67 to $175.89. To buy the Dubai-based business-to-business travel business Destinations of the World, online travel group Webjet is forking out $240 million.


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