As Facebook and Netflix trade in bear market territory, tech investor Paul Meeks gives two tech alternatives

Facebook and Netflix – two of the hottest FANG stocks – are now trading in bear market territory after disappointing earnings over the past two weeks.

Long-time tech investor Paul Meeks has two alternatives he feels offer far better value.

"I like some of the Chinese tech names, particularly the internet leaders like Alibaba and Tencent," Meeks, chief investment officer at Sloy, Dahl, & Holst, told CNBC's "Trading Nation" on Friday. "In some cases you could say they have better growth potential than the American net leaders, and you're buying them in just a total wipeout in their stock markets."

The Shanghai Composite, China's major stock market, is in a bear market after having fallen 20 percent from a 52-week high set in January. It is now down 13 percent for the year.

Alibaba and Tencent are due to report on their quarters in August, and Meeks says it's best to wait to see their results before taking the leap.

Facebook's historic sell-off last week capsized the rest of the tech sector. Over Thursday and Friday's session, the FANG stocks – Facebook, Amazon, Netflix, and Alphabet – lost nearly $166 billion in market cap.

Even after that sell-off, the Wall Street darlings aren't cheap enough for Meeks.

"I wouldn't buy them today. I would buy them on a correction," Meeks said. A correction marks a 10 percent pullback from 52-week highs. Such a drop would put Apple and Netflix at levels not seen since the beginning of May, and Alphabet back to its early July price.

"They will have a slip up at some point and these stocks won't go down 2 percent, they'll go down 20 percent because they're volatile tech names and that's your buying opportunity," he added.

The possible exception is Facebook, which needs to offer up better incentive before Meeks feels comfortable buying the stock.

"I'll get re-interested in Facebook under two scenarios: One, some clarity around the business model or two, the stock probably has to be $10 or $15 lower than where it's currently trading to get me back in," he said.

Meeks reduced his position in Facebook when it hit the high-$170s earlier in the week. He still has a small holding.

Facebook stock ended last week around $174, roughly 20 percent lower than the all-time high set on Wednesday. The following day, the social network lost $119 billion, a Wall Street record, after warning of increased expenses on security and privacy improvements.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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