The best stocks to own over the last number of years is the FAGA or an acornym like it because they had the combination of growth, competitive “moats” and fat margins. What is not to like – the FAGA stands for Facebook, Apple, Google and Amazon. Similar to all things on cycles, while the companies are dominate and are still expecting to be, the combination of growth, competitive moats and fat margins is changing. Shira Ovide writing for Bloomberg News suggests they are changing as fast as the tech companies change.

Apple is still dominate in iPhones (2/3 of its revenues come from it), but Apple is less flush that it normally is (although it has $100 billion in accounts outside of the US), however its most recent quarter, operating profit as a share of revenue was its lowest in 9 years. Apple is spending more and more of research and development, Apple’s operating expenses were nearly 12%, the highest percentage in 7 years.

Amazon is a powerhouse in delivery of packages and over 100 million people pay $100 to be in Amazon Prime to have free shipping and access to music. Amazon is increasing the number of merchandise warehouses, Web video programming and computer-data centers which is good. What is not good, is a operating profit margin of 1.7%. Amazon has gone a terror of spending in the last 12 months for every $1.00 in cash coming in, Amazon keeps 1 cent after accounting for its cash expenses.

Facebook and Google tend to have higher margins, but Google’s parent company Alphabet gave its partners in YouTube videos and Web browsers 22% of its revenues which is highest share since 2014. Google’s profit margin is still a healthy 26.5% but it was 31% in 2011.

Facebook is trying to become a TV-like destination as Facebook is trying to do the same things as Google through partner sharing. The same result will be lower margins for Facebook.

Linking to dividend paying stocks, it is very hard to find stocks which have the great combination of growth, competitive moats and high margins. For the past number of years it has been the FAGA stocks and their stocks reflect the higher stock prices. According to a recent study, it has been important to be in the stocks for less than 5% of the entire listing of stocks leads the market.

There are more questions than answers, till the next time – to raising questions.