Why all FANG shares have jumped today – The Fool Motley

What happened

The entire group of so-called FANG shares climbed in unison on Wednesday morning, all thanks to one of them reporting a solid earnings report.

After a strong performance in the third quarter Facebook (NASDAQ: FB) – the "F" in FANG – the other letters of the acronym followed the stock of the social network with positive jumps, sometimes even higher than the maximum gain of 7% of Facebook. Amazon (NASDAQ: AMZN) benefited from a maximum rise of 6.1%, Netflix (NASDAQ: NFLX) shares climbed 9% and Google's parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) saw its two share classes climb to around 4.9%.

Source of the image: Getty Images.

So what

To be clear, Facebook was the only company in this group to have important news to report here.

Amazon, Netflix and Alphabet have already reported their respective results for the third quarter and none of them had significant product launches or new analyst reports to rely on. The closest thing to an independent trigger event came from Amazon, which partnered with Western Union (NYSE: WU) launch an international payment system. But given that Western Union shares have not grown more than 2.6% on this nugget of news and that the partnership probably has more weight for the smaller partner anyway, I here is cheating on me assuming that the major pilot agreement reached behind the jump from Amazon today.

So that was what Facebook was doing. The company's third-quarter sales increased 36% over the prior year, reaching $ 13.7 billion. Earnings rose 10% to $ 1.76 per share. Your average analyst was expecting a profit of nearly $ 1.47 per share on revenues of around $ 13.8 billion. This was enough to trigger a rebound in Facebook's blocked stock chart, allowing all FANG friends to follow in the footsteps of the company.

Now what

The rise of Facebook is a start, but FANG shares still have a long way to go before they can set new records. Here's how October had treated our four strong stocks in growth before Facebook's report last night:

FB data by YCharts.

Investors in Facebook, Amazon, Netflix and Google / Alphabet will have to keep looking for good news for a while. The generally unstable market temperament does not favor these actions, as the FANG concept itself is a type of high octane growth investment that is of little interest to the traditional community. who seeks value Many investors see these stocks as more risk than rewards, making them vulnerable to sudden spikes in volatility.

That is what is happening today. The good news from Facebook has boosted all FANG shares, offsetting some, but not all, downside volatility this month.

John Mackey, CEO of Whole Foods Market, an affiliate of Amazon, is a board member of The Motley Fool. Suzanne Frey, a member of the Alphabet Executive, is a member of The Motley Fool's board of directors. Anders Bylund holds shares in Alphabet (A shares), Amazon and Netflix. Motley Fool owns shares and recommends Alphabet (A and C shares), Amazon, Facebook and Netflix. The Motley Fool offers the following options: November 2018 short for $ 155 calls on Facebook and long November 2018 for $ 135 of options on Facebook. Motley Fool has a disclosure policy.