Stock #6 – Amazon (AMZN)
Amazon (AMZN) started as Earth’s biggest bookstore and is now leading the charge to bring books into the 21st century with a digital format for the written word. The company’s breakout success with its Kindle eReader has breathed new life into this dot-com icon and has pushed shares up to about $120.
The success of the company’s electronic reader is not just on blogs and customer forums, either. This product has generated very real profits for Amazon. In fact, the Kindle helped boost AMZN’s third-quarter net profit to $199 million, or 45 cents per share, on $5.45 billion in total sales. Analysts were expecting earnings of 33 cents per share on $5.03 billion, so AMZN posted a huge 36.4% earnings surprise and a 7.7% sales surprise.
These results sparked a wave of buying pressure that sent shares up to their highest level in almost 10 years.
But if you think this is the peak for Amazon, think again. Relentless expansion has propelled Amazon in countless directions in the quest of bigger sales and profits. The company’s main website 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 Kindle.
Once the American consumer starts spending freely again, I expect to see Amazon shares skyrocket. Though AMZN is trading at over $100, it is a bargain right now so buy in before the surge.
- Poll of the Day