Top Stock #1 – Amazon (AMZN)
Amazon (AMZN) started as Earth’s biggest bookstore, but has rapidly become the planet’s biggest
anything store. Relentless expansion has propelled Amazon in countless directions in the quest of bigger sales and profits. The company’s main Web
site offers anything from books to auto parts to groceries! Shoppers can also download digital content such as games, MP3s and movies to their computers
or handheld devices — including Amazon’s innovative portable reader, the widely successful Kindle.
A recent report in The Wall Street Journal indicated Sony is going to go up against the Kindle with two low-priced offerings of its own.
But I’m not worried — the e-readers will be priced at $199 and $299. The fact is, you can get an entry-level Kindle for the same price of $299
and get the scale of Amazon’s website that contains a massive library of books and music.
Besides, some pundits are already expressing their doubts that Sony can maintain its competitive pricing without putting its bottom line at risk.
Even if Sony cuts into sales, it could actually take a loss for a few quarters on this effort in a quest to get some of the market share — a
very risky proposition right now.
As a result, I remain confident the Kindle will stay the industry standard in e-readers and will continue to give AMZN a competitive edge.
In fact, Amazon is faring much better than just about any retailer out there. The company earned 32 cents per share in the second-quarter, which
was a penny higher than Wall Street’s estimates. Additionally, the company was able to grow its revenue 14% and expects its 3Q sales to range between
$4.75 billion to $5.25 billion in the third quarter — an 11% to 23% increase compared with the same period in 2008, and above the consensus
estimate of $4.9 billion.
AMZN is a great buy.