Strategist: FANG Stocks Can Still Grow In A Sluggish Economy

Investors who hold one or more of the "FANG" stocks shouldn't be worried about a slowing economy, according to Goldman Sachs' chief U.S. equity strategist David Kostin.

Speaking as a guest on CNBC's "Squawk on the Street" Wednesday, Kostin backed up his thesis that shares of Facebook Inc (NASDAQ: FB), Amazon.com, Inc. (NASDAQ: AMZN), Netflix, Inc. (NASDAQ: NFLX), and Google/ Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) are immune to an economic slowdown.

A "modest" growth environment implies that growth is still "relatively scarce," the strategist explained. As such, the growth stocks where "tech is a prominent area" are expected to continue performing well and even outperform.

"Basically you want to be in tech and particularly where there is secular growth," he said. "And there is a group of stocks where you have revenue growth that is double digit, and that's still relatively rare."

Meanwhile, the FANG stocks could boast a revenue growth profile of 10 to 20 percent but are trading at three to five times enterprise value to sales. This represents a "sweet spot" that investors should take advantage of, Kostin added.

Looking forward to the rest of 2017, Kostin is expecting a modest growth environment as notable catalysts for the economy, namely tax reform and infrastructure spending, will only be seen next year.

Finally, while FANG stocks would be ideal in a sluggish environment, investors may be better off buying value and cyclical stocks in an accelerating environment.

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