Zana Mad Maax
Zoom. Alphabet. Nvidia. Amazon. Meta. Alibaba. Daqo. Microsoft. Apple. Adobe. Xpeng.
 
FAANNG had to be trashed after two of the companies changed their names (Google to Alphabet and Facebook to Meta). The above acronym – Zana Mad Maax – is quite a mouthful. However, the companies are noteworthy, and certainly merit the effort it requires to remember their names.
 
There is one fly in the soup. Most of these companies are trading at all-time highs. So, a measured approach to getting invested is better than diving all in. On the other hand, there are a few superstars on the list that are still flying under the radar of investors and are trading at very low price-earnings ratios.
 
So, here’s a brief overview of each of the companies. More key data can be found in the Zana Mad Maax Stock Report Card. It’s too lengthy to attach here. If you’d like a copy, just email [email protected] with ZANA MAD MAAX in the subject line.
 
I’ll also be hosting a free videoconference on this topic soon. If you want to attend live, just send an email to [email protected] with VIDEOCON in the subject line. (If you’re already on the VIDEOCON list, you don’t need to send an email.)
 
​Zoom (symbol: ZM): We used to meet over coffee or at the water station. We now meet over Zoom. “Zoom me” has become a thing. When a noun becomes a verb, it’s ingrained in the culture. Enough said about how Zoom has become a part of our lives. If Work-From-Home continues, and surveys of Gen Z and Millennials indicate that it will, Zoom is here to stay. It’s understandable that the company’s revenue grew by 54% in the 2nd quarter and is projected to have 31% revenue growth in the coming quarter. Future growth may require an acquisition, and accelerated geographic and product expansion. Zoom’s P/E is very lofty at 81, with a forward P/E of 55. Ease into ownership.  
 

​Alphabet (symbol: GOOG) companies have made themselves the ABCs of our daily life. From Google maps, to Gmail, to search and even YouTube, chances are most of us are using quite a few of Alphabet services multiple times daily. Alphabet’s earnings growth and profit margins are quite impressive for a company valued at almost $2 trillion. The P/E is high at 28.
 
Nvidia (symbol: NVDA) is a very prolific artificial intelligence company, with AI products including self-driving, cryptocurrency, gaming, data centers and more. It was always included in my version of FAANNG. With 50% year-over-year revenue growth, it continues to be the Lord of the AI space. The company is projecting 48% annual revenue growth in the 4th quarter. Earnings should be announced at the end of February 2022. If you thought Zoom’s P/E was interstellar, Nvidia’s is 90, with a forward P/E of 70.
 
Amazon (symbol: AMZN) has become essential to what we eat, drink, wear and watch. This company has the slowest growth and profit margins, at 15% and 6% respectively, with a very elevated P/E of 69. If you already own it, then you might be looking to rebalance (i.e. capturing gains). If you don’t own the company yet, then develop a strategic plan and shopping list that allows you to buy in at a better price. (For example, Amazon’s price dropped to $1785 in March of 2020. Its current price is $3696.)
 
Meta Platforms Inc. (symbol: FB): You might be disgusted with Facebook, but chances are you’re using at least one of the other Meta businesses. If you have friends or family abroad, it’s difficult to live without WhatsApp. Instagram has become one of the most popular social media platforms. Gaming has always been part of the Metaverse, and the company is expanding into VR headsets with Project Cambria and Oculus. Meta has impressive growth and profit margins, at about 34%. The price-earnings ratio is not outlandish (though high) at 24. Be aware, however, that if you buy today, you’re purchasing close to an all-time high, in the hopes that the company’s share price goes higher. A strategic buy-in, or rebalancing if you’re already in, is a sound plan. The Facebook troubles are not over yet, and bad news can drag the share price of a good company down.
 
Alibaba (symbol: BABA) is the Amazon of China. People really can’t live without it there. It also has much higher revenue growth (34%), higher profit margins (19%) and a very low PE (19) when compared to Amazon. Alibaba, like most Chinese stocks, plunged when the prior White House Administration threatened to delist Chinese companies from American stock exchanges. That hasn’t happened. Many investors were chomping at the bit to buy Alibaba in January at  $319/share. Today’s price is just $144.
 
Daqo (symbol: DQ):is a leader in polysilicon and wafers, based out of China. Their solar products are needed in a world that is committing to renewable energy, which is why the company’s annual sales growth was 367% in the last quarter. This is another Chinese company that’s trading at a very low price-earnings ratio, at 11, with a forward P/E of just 6.
 
The polysilicon industry is seeing prices soar. Production remains strong, even though there are energy quotas in China. 4th quarter production might be slightly lower than the 3rd quarter, even though demand is high, while the company works through the red tape to expand their operations. However, if polysilicon and wafer prices and demand remain elevated, which they are expected to, then the revenue could come in close to 3Q revenue of $585.8 million, an increase of 136% over the 4th quarter 2020 revenue of $247.7 million.  
 
The 4th quarter results should be announced the 1st week of March 2022.

Microsoft (symbol: MSFT): I am using Word to write this blog. I frequently use Excel for accounting and data. Here again is a daily need. Microsoft is a business staple/technology company. The P/E is elevated at 38. The profit margins and growth remain impressive, particularly for a $2.6 trillion company, at 36% and 22%, respectively.
 
Apple (symbol: AAPL): Apple is another business staple/technology company that we can’t live without. Apple has a finger in music, streaming and AI, as well as connectivity. Apple’s revenue growth was 29% with 26% profit margins. Apple and Microsoft are the two most valuable companies in the world, at $2.6 trillion. However, Apple’s P/E is slightly more palatable, at 27.
 
Xpeng (symbol: XPEV): XPeng is taking on Tesla’s Model 3 in China. The XPeng P7 received the highest safety rating of all EVs scored in China (source: CleanTechnica.com). Xpeng’s revenue growth soared 537% in the 2nd quarter, and should be almost triple the revenue of 2020 in the 3rd quarter, as well. XPeng posted a net loss of $185 million in 2Q 2021 – normal for an early-stage, high-growth company. 3Q 2021 vehicle deliveries were up 48% sequentially and 199% year over year.
 
XPeng will report 3Q 2021 results on Tuesday, Nov. 23, 2021, before the market opens.
 
Bottom Line: All of these ZANA MAD MAAX companies should continue to dominate in 2022. You’ll want to develop a plan to own them. Many of the Chinese stocks are trading at half the prices they were trading at in January of this year. U.S. stocks are, generally, trading near all-time highs, with elevated price-earnings ratios.


Full Disclosure: I own many of the stocks featured in this blog. 

If you'd like to learn how to pick stocks, how to properly set up your retirement plan and how to protect your wealth, join us for our Feb. 11-13, 2022 online Financial Empowerment Retreat. Email [email protected] to learn more. 

About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 5th edition of The ABCs of Money was released on September 17, 2021. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. ​

​Pop Culture
Squid Game is Netflix’s most popular TV show ever with a “mind-boggling 142 million member households globally” watching in the first four weeks of its run, according to Netflix’s 3rd quarter earnings release of October 19, 2021. Ted Lasso just swept the Emmys. While you may think of this as Apple TV versus Netflix, Warner Brothers is the creator of Ted Lasso. We know the top hits of Netflix. Disney has been a beloved brand for a century. However, are you aware that the combined merger of Warner Bros. and Discovery includes the Ted Lasso, Dune, Harry Potter and HBO franchises?
 
Streaming Wars
Netflix and Disney are currently one and two in the streaming wars. However, S&P Global is projecting that the combined merger of Warner Brothers and Discovery into Warner Bros. Discovery, with a stock symbol of WBD, is going to put the newly combined company into the number two spot at some point (unspecified), behind Disney. This puts pressure on Netflix, and even more heat on traditional TV brands like NBC (owned by Comcast). With a price-earnings ratio of 64, investors might not be pricing in the competition that Netflix faces going forward – yet.

Revenue Growth
If you look at the revenue growth in the above Stock Report Card, AMC Theaters looks outstanding. However, that’s because last year was terrible. AMC’s revenue dropped from $5.5 billion in 2019 to $1.2 billion in 2020. It’s looking like 2021 will bring in revenue over $2 billion. However, that is still much lower than it was before the pandemic. AMC was struggling with cash burn even when it brought in $5.5 billion in revenue. Today, the company still faces deferred lease expenses of at least half a billion. This, combined with high-interest rate debt has plunged AMC’s credit rating to CCC plus.
 
The rally on Reddit to save AMC has allowed the company to keep from sliding into bankruptcy in the near term. However, even with people returning to theaters, there is a very real possibility that AMC will continue to burn through cash until at least 2023. A return to profitability will require structural changes (and likely less staff and far more automation).
 
In terms of revenue growth, the story that looks the most compelling is the merger of Warner Brothers with Discovery. This was done (at least partly) because AT&T (the parent company of Warner Bros.) needed the cash ($43 billion) and to offload some debt ($1.5 billion as of March 31, 2021). The combined company could be worth $130 billion, according to Bloomberg. Discovery shareholders will be awarded 29% of the company, while AT&T shareholders will receive 71% of the new company.  
 
Debt
The top three streaming networks, Netflix, Disney, and Warner Brothers Discovery, are all rated at the lowest rung of investment grade (BBB). The popularity of online entertainment engagement and subscription revenue has these companies with a stable outlook. However, as interest rates rise, the debt load will drag on profit margins. There’s not a great deal of room for added expenses. Disney still has room to improve its cash flow as more theme parks return to full capacity. Currently, however, Disney is only pocketing 3.8% of its revenue, as of the 3rd quarter of 2021. Of course, this is better than last year’s losses of -$2.864 billion.
 
Price
Most stocks in the streaming services are very expensive. However, the Warner Bros. Discovery deal could reward Discovery shareholders. If the combined value hits $130 billion. Discovery‘s share of that would be $37.7 billion. That is 2.7 times higher than Discovery’s market value of $13.93 billion today. Analysts peg the value with a forward PE of only 10. By comparison, Netflix and Disney both have very elevated forward PEs, at 63.60 and 36 (like purchasing avocados for $20 and $10 each, respectively). The average price earnings ratio is about 17.
 
Bottom Line
We’re all aware of the cost of our streaming services. We might even jump around, subscribing to Netflix when our favorite series drops, and then switching over to Apple TV when the preferred pastime launches there. However, it’s time to start understanding the price of ownership. Netflix and Disney could have bright futures. But if the price is too high, even the smallest miss in expectations could cause share price losses. On the other hand, it’s possible that investors haven’t done the math to discover just what a deal the Warner Bros. Discovery merger offers investors.
 
 
Full Disclosure: I own shares of Discovery, in anticipation of the finalization of the merger between Warner Bros. and Discovery in the first half of 2022.

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Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 5th edition of The ABCs of Money was released on September 17, 2021. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. ​

 
The Federal Open Market Committee is meeting Nov. 2-3, 2021. Everyone’s eyes and ears will be on whether the Feds will begin tapering their QE bond purchases of Treasuries and mortgage-backed securities. It is expected that tapering of $15 billion/month will be announced. The hope is that since this is already expected, there will be no Taper Tantrum, and that the Santa Rally will continue to offer gifts, such as the 6.9% S&P500 gain in October of this year (after September’s 4.76% decline).  
 
 
COP26, the U.N.’s  Climate Change conference began on Halloween in Glasgow, Scotland, and ends on Nov. 12, 2021. The intention of the conference is to unite the world and to accelerate climate action. You can follow the speeches and meetings at the link below.
 
https://ukcop26.org/
 
The Power of 8 Billion Green Lives
Natalie Pace will be having a conversation with Felicia Tomasko, a leader of the LA Yoga community, tomorrow, Nov. 2, 2021, at 2 pm PT about the power of almost 8 billion individuals joined together to restore our planet. Visit LA Yoga’s social media page to join us LIVE.
 
 
Seasonal Trends and Wall Street Secrets at The Money Show. Natalie Pace will be revealing many Wall Street Secrets in her Nov. 3, 2021 webinar, offered by The Money Show. These tips are essential to thriving on the 21st Century’s wild Wall Street rollercoaster. Join us a 4 PM PT (1 PM PT). Click on Money Show for registration details.

​Free Coaching. Register for the Feb. 11-13, 2022 Financial Empowerment Retreat today, Nov. 1, 2021, to receive the lowest price and a complimentary, private prosperity coaching session (value $300). Email [email protected] or call 310-430-2397 to learn more and register now. Click on Retreat to access a flyer with additional information and testimonials.
 

Free Books. The 5th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is ebooks are free now through Nov. 4, 2021. Both of these books were just updated in August with essential information that you’ll want to read, even if you’ve perused these books previously.
 
At NO COST, they also make great resources for students and teachers. Teens love learning how to pick stocks using the strategies that Natalie Pace developed, which earned her a ranking of No. 1 stock picker. Those systems are featured in Put Your Money Where Your Heart Is. In addition to calling Google at the IPO, the book featured a Tesla Roadster when it was first released (back in 2008). Put Your Money Where Your Heart Is is an original ESG Investing book that is a must-have resource for anyone who cares about climate action.
  
The ABCs of Money offers essential strategies and resources for debt reduction, budgeting, investing and reducing your carbon footprint with smarter energy choices. Getting budgeting, investing and energy smart can add up to keeping thousands of dollars annually that would be spent making the landlord, the debt collector, the insurance salesman, the gasoline station, the utility company, the medical profession and others rich at your own expense. Natalie Pace's time-proven 21st Century investing strategies earned gains in recessions and outperformed the bull markets in between. Email [email protected] or call 310-430-2397 for testimonials from VIPs of Wall Street and Main Street.
  
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