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 info@NataliePace.com 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 info@NataliePace.com 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 info@NataliePace.com to learn more.
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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.
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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.
Natalie Pace is the co-creator of the Earth Gratitude Project and the author of The Power of 8 Billion: It's Up to Us, The ABCs of Money, The ABCs of Money for College, The Gratitude Game and Put Your Money Where Your Heart Is. She is a repeat guest & speaker on national news shows and stages. She has been ranked the No. 1 stock picker, above over 830 A-list pundits, by an independent tracking agency, and has been saving homes and nest eggs since 1999.