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3 FAANG Stocks That Score a ‘Perfect 10’

In the first week of September, the markets saw a sudden drop from peak values. That fall was most pronounced in the NASDAQ index, which dropped from 1,200 points – some 10% – in just 5 trading sessions. Since then, however, the situation has stabilized. Stocks have bounced up and down, but the NASDAQ has generally held steady at or near 11,000 for the past three weeks.The holding pattern is likely more important than the slide. It’s lasted longer, and appears to represent a classic market correction. The NASDAQ’s 5-month run to its September 2 all-time high left it somewhat overvalued, and it’s now fallen back to a more sustainable level. This is borne out by a look at three major components of the index, members of tech’s ‘FAANG’ club.The FAANG stocks are Facebook, Amazon, Apple, Netflix, and Google (Alphabet). They are the 800-pound gorillas of the tech world, companies of enormous size and scope, whose operations and market fluctuations have been a major driver to the NASDAQ, and the overall stock market, in recent years. And three of them have another important point in common, too: each gets a ‘Perfect 10’ rating from the TipRanks Smart Score.The Smart Score rates every stock according to set of 8 factors that have historically correlated with future outperformance, and combines them into a simple 1 to 10 scale to indicate the stock’s likely future course. Now let’s see why these tech giants scored so highly, and what Wall Street’s analysts have to say about it.Facebook (FB)First on our list is Facebook. The social media giant has spawned both an industry and much controversy in the years since it burst on the scene. In recent years, Facebook has come under fire for advertising policies, privacy breaches, and accusations of censorship – but none of that has halted the long-term growth of the stock.The company makes its money selling advertising, using AI tracking algorithms to monitor account activity and create perfectly target ads. It’s a system that has introduced us, in less than one generation, to impressions, banner ads, and pay-per-click. It has changed the way we do business online.With the election coming up, Facebook is not shying away from controversial actions. The company has announced that it will ban political ads in the week before election day, as well as censor groups deemed to promote violence or spread false information about the corona pandemic. Intended to be politically neutral, these moves have drawn criticism from side of the political arena.That has not stopped Facebook from raking in the money, however. Earnings did fall 33% sequentially in the first quarter of this year – but that should be put in perspective. FB’s pattern is to register its best results in Q4 (holiday advertising), and its lowest results in Q1. With that in mind, it’s more important that, during the ‘corona quarter,’ Facebook’s Q1 EPS were up 101% year-over-year. Results in Q2 were almost as impressive, with the $1.80 EPS being up 97% year-to-date. Looking at Facebook’s near-term prospects, 5-star analyst Mark Zgutowicz of Rosenblatt Securities see plenty of reason for optimism. Zgutowicz admits that consumers may develop a ‘spending fatigue’ in the wake of anti-COVID stimulus bills, but “given Facebook’s immense exposure to ecommerce with now 9M active small business advertisers, and the holiday season soon approaching,” the analyst believes “any stimulus spend fatigue will be offset [by] escalating ecommerce trajectory.”In line with these comments, Zgutowicz rates FB a Buy and sets a price target of $325. This target implies room for 24% share appreciation in the next year. (To watch Zgutowicz’s track record, click here)Overall, Facebook’s Strong Buy consensus rating is based on 38 recent reviews, with a breakdown of 33 Buy, 4 Hold, 1 lonely Sell. The shares are priced at $261.90 and have an average price target of $295.82, suggesting a 13% upside from current levels. (See FB stock analysis on TipRanks)Amazon.com (AMZN)Next up, Amazon, is the market’s second largest publicly traded company, with a market cap of $1.59 trillion and a famously high share price exceeding $3,000. Amazon has proven a master of self-reinvention since the late ‘90s, starting out as an online book seller and surviving the doc.com bubble to become, now, the world’s largest online retailer, where customers can buy everything from buttons to brie, and even books.Looking at Amazon’s performance, the most immediate salient factor is the steady rise in share value over the years. Under Jeff Bezos’ leadership, Amazon does not pay out a dividend or conduct share buybacks; investors benefit solely from share appreciation….