Tech Stocks: Time to Switch to TANG

Posted On April 17, 2018 2:05 pm
By: Steve Smith

The NYSE FANG+ index, which tracks 10 global tech heavyweights, has bounced back after last month’s slide and is outperforming the S&P 500 in April: It is up 1.8% versus 1.4% for the broad market index.

Brad Slingerlend —portfolio manager of the Janus Henderson Global Technology Fund, which has stakes in all four FANG stocks, as well as other big tech companies like Apple, Tencent Holdings Ltd. and Alibaba Group Holding Ltd. —says his fund started reducing its position in Facebook before the data-privacy controversy.

He sees further declines ahead for the social-network company despite the shares already trading 16% below a 52-week high hit in February. “I’m not sure [Facebook shares] have come down enough to reflect that risk” of how it handles its data, Mr. Slingerlend said, adding that Chief Executive Mark Zuckerberg’s tight control of the company’s voting shares creates added uncertainty for investors. “The range of outcomes for Facebook has widened significantly.”

Vontobel Asset Management, the nearly $40 billion asset-management arm of Zurich-based Vontobel Holding AG , also sold shares of Facebook in the past month, according to a FactSet analysis of the social network’s stakeholders, while Copper Rock Capital Partners LLC, a boutique asset-manager that overseas more than $5 billion, also pared down its holding.

Smaller retail investors appeared to be getting out of the stock as well, as several brokerage firms, including LPL Financial Holdings Inc., reported Facebook share sales in the past month, according to FactSet’s data.

A spokeswoman for Facebook declined to comment.

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Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.