Two portfolio managers were split on whether investors should be putting their money into FANG stocks — Facebook, Amazon, Netflix, or Google (which now trades as Alphabet).
Although the stocks have fallen this week, David Sowerby, portfolio manager at Loomis & Sayles & Co., said he thinks Amazon, Alphabet and Facebook could be good investments. Looking at those names solely from a price-to-earnings standpoint leads to missing out on "long-term shareholder creation," he told CNBC's "Closing Bell" on Friday.
While FANG's business model comes off as attractive to some, others would not put new money in these stocks, and may consider the risk-reward potential not favorable for the average investor.
"The market cap of these names has gone up $450 Billion in a market that's flat-to-slightly-down year-to-date, and the price-to-sales ratios have gone up 50 percent" said Ann Miletti, senior portfolio manager at Wells Fargo Advantage Funds. "It's really hard to sustain growth at those levels," she added.
While Miletti discouraged investing fresh money in these stocks, she didn't advocate selling existing holdings either.