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As the S&P 500 stalks the 3,000-point barrier and arouses concerns about stretched equity market valuations, there is a select group of revenue-producing champions whose top-line prowess looks appealing.

The five leading generators of revenues in the S&P 500 are Walmart, Apple, Berkshire Hathaway, UnitedHealth Group and Amazon, a group dubbed Wabua by analysts at OppenheimerFunds.

Their comparison of Faang stocks and Wabua certainly shows a stark difference in free cash flow, even with Amazon and Apple being members of both groups.

Oppenheimer says that an equally weighted portfolio of the Faangs — Facebook, Amazon, Apple, Netflix and Google (Alphabet) — produces a free cash flow yield — or the percentage of shareholder equity that companies earn in free cash — that is less than half of that generated by companies under the Wabua banner.

This may prove timely given the pullback suffered by the Faangs after the group’s strong run for much of the year. Shares in Facebook, Netflix and Google have appreciably lagged behind Amazon and Apple of late, suggesting a rotation within the big tech names is under way.

Against the backdrop of the Faangs’ massive rise in value and dominant leadership of recent years, Oppenheimer notes: “This may prove an opportune time to analyse the fundamentals of these companies alongside their market caps. For investors seeking a Faang alternative, weighting portfolios by revenue rather than market cap grounds the equity portfolio in the fundamental bedrock of top-line sales, which could prove effective as valuations become increasingly stretched.’’

Perhaps, the Wabua, a genus of spiders found in Northern Queensland, have bigger fangs.

Read More: Wall Street shake-up scatters US tech behemoths

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