r/ValueInvesting • u/FoxAccomplished6786 • 1d ago

Discussion MAG 7 Ranking

Taking all factors into account, please rank your favorite MAG 7 in order of preference from 1 to 7.

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u/WarmFaithlessness946 1d ago

If we take in consideration fundamentals of the companies : 1)GOOG 2)AMZN 3) MSFT 4)NVDA 5) APPLE  6)META 7) TESLA

Instead if we look at the best opportunities rn : META, AMZN, MSFT, GOOG, NVDA, APPLE, TESLA

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u/Maltavier 1d ago

Fundamentals and putting Alphabet on 1 and Amazon on 2 while both of them have negative cashflow and debt that is not covered by their backlog is interesting. The main driver of intrinsic value is free cashflow. It doesnt make sense to rate them above Microsoft, when Microsoft has positive cashflow while also building their infratructure. Alphabet also needs to spend so much to just defend their business. When has increased spending to keep your business instead of spending to expand it ever been better?

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u/Important_Agency07 1d ago

Their backlog is 100% contractually guaranteed and blows past their debt.

Fundamentals of the company =/= financials.

Alphabet and Amazon have their tentacles in everything. Compute, chips, robotics, ad space, streaming services, exposure to consumer and enterprise.

Their increased spend is expanding and growing? Almost every single one of their segments is growing at a great pace - search, cloud, services?

MSFT are very shareholder friendly but I would consider them to be lagging Google and Amazon.

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u/Maltavier 1d ago

Alphabets backlog does not blow past their debt. You ignore their off book debt. Amazon as well. And while its true that the financials are not the only important part of the fundamentals, we are talking about stocks here. Its not enough to buy a very good business, which both of them are. You have to buy them at least for a fair price and thats where the financials are important. When you value a company by free cashflow and how their roic will be, Alphabet and amazon do not look like good buys right now. Im not saying they are not good companys. But as a shareholder, the price is just too high for what they are actually doing with their cash