Are the Fool’s “FAZER” stocks “The Next FAANG?”

What are the "if you missed Netflix, better buy this" stocks teased for the Motley Fool's presentation tomorrow?

By Travis Johnson, Stock Gumshoe, March 2, 2020

We’ve had a lot of questions pop up over the past couple days about the Motley Fool’s “FAZER” stocks, which will apparently be the focus of a “special presentation” they’re making tomorrow morning.

The gist of the email, which comes from Eric Bleeker, is pure FOMO — it triggers all the feelings of angst in those who missed out on buying Netflix when the Motley Fool was recommending it 10-15 years ago by hinting at the next crop of stocks that could create similar 20,000% returns. Here’s how they put it:

“If you’re hurting from having missed out on the incredible stock run-ups of even ONE of Facebook, Amazon, Apple, Netflix, or Google, and are ready to make up for it with the “FAZER” stocks… then this event is for you.”

That’s certainly a feeling that I get from time to time — we all do. You can’t pick every great stock, and even when you do pick great ones you sometimes sell at just the worst time. (Yes, I’ve held Google and Facebook since the beginning, but missed Netflix and Amazon early on and, worse, I’m still kicking myself for selling Tencent in 2007.)

We all know that this kind of backward-looking jealousy is not terribly helpful, but we can’t help it… and sometimes the only real salve is to pick the next winner. So that’s the urge being picked at by the Motley Fool copywriters as they hint at this net group of (possible) future leaders… shall we try to name them before the presentation?

We don’t actually know what service the Fool will be selling at 9am tomorrow morning, but I’m quite sure they’ll be selling something and holding back on some of their ideas until you pay. I’m listing this under Rule Breakers until we get some clarification about what they’re pitching, but most likely it will be one of their higher-end nice services like Discovery or Extreme Opportunities. [Update: The presentation turned out to be pitching Motley Fool IPO Trailblazers, at $1,300/yr]

And the odds are pretty good that these stocks will not really be “new” to us — the Fool tends to stick with ideas for a considerable period of time, and to really latch on to their favorites, so I imagine we’ll have some repeats here who have been teased before… which is helpful, because the clues are a little limited.

Here’s what we get in the email ad:

“Which is why when I heard the other day that some of my fellow analysts at the Fool had just identified five technology companies they consider “The Next FAANG stocks,” I dropped everything I was working on to find out more.

“Turns out, they’re calling them the ‘FAZER’ stocks.”

And then we’ll go through them one at a time…

“F — the just-$2B market cap edge computing pioneer that enables internet data to travel between different countries — and even continents — at warp speed.”

This is almost certainly Fastly (FSLY), which is leading the surge for independent edge computing (independent of things like Google or Amazon cloud services, at least).

I haven’t seen Fastly pitched by the Fool before, though it is the kind of small growth stock that they tend to like… and it’s one that I started building a position in earlier this year in the Real Money Portfolio (it’s still a very small position, since I think it’s a very high-risk stock).

My rationale was that Fastly could have a “first mover” advantage in edge computing, as the one real “pure play” company that’s focused on this trend — edge computing is not really about faster transmission of internet data, though, that part of the pitch is a bit odd, it’s really about making the user experience better by moving the processing work closer to that user. What Fastly does is take the next step beyond the content delivery network (CDN) that was most popularly implemented by Akamai over a decade ago — the CDN takes content to the edge of the internet so you can access big files more quickly, like storing that hot Netflix movie in the local telecom facility in your town instead of sending that data from a central data center each time someone in your area wants to view it. That saves distance, which saves time.

Fastly goes beyond that — instead of moving a file to the edge of the internet, closer to end users, it moves the logic and the processing to the edge. That means the “thinking” that you’re demanding from a website is done closer to you, which means the “answers” will be fed back to you faster… and it also means the data you enter is more localized and silo’d, and therefore there’s a good chance that it will improve security.

Here’s a little bit of what I wrote to the Irregulars in their Friday File a couple weeks ago, follo