It has been a long time since Amazon.com, Inc. (NASDAQ:AMZN) was simply a disruptive online book retailer. But from those modest beginnings AMZN has bloomed into a global retail, publishing and cloud giant.
It is not too much to say that Jeff Bezos has built one of the premier companies of the twenty-first century.
The reason he was able to pull together all these disparate parts is that he had a vision and has been waiting for technology to catch up. What I mean is, Bezos knew what was possible on the fringes and he knew that those fringes would one day be commonplace, widely distributed technology. Know this, he began assembling parts of the company and built slowly into areas of interest.
This is a very similar model to Mark Zuckerberg at Facebook Inc (NASDAQ:FB). He also continues to bring in seemingly unconnected businesses, like Oculus, and then integrates them into a larger vision. FB had to wait for technology to catch up to its ideas. And the same has been true of AMZN.
AMZN Was Ahead of the Game
Bezos talked about drone package delivery a few years ago and everyone — including the Federal Aviation Administration — thought it was a ridiculous idea. Now, the FAA has issued drone regulations and Amazon is becoming one of the most disruptive logistics companies in the market.
AMZN was years ahead on cloud computing. Its Amazon Web Services division is the largest cloud computing firm in the world. And it recently just signed customer relationship management giant Salesforce.com, Inc. (NYSE:CRM) as a client. This will certainly be a very valuable two-way street for CRM.
But at the core of all the business divisions is the fact that it all circles around the customer, just like it did in the beginning. There is now award-winning content for customers; it’s Prime membership offers a number of useful options for members; its retail operations have exploded and its distribution network is world class.
What’s more, Bezos remains a major AMZN stock shareholder. That makes a big difference when you have a founder invested literally and figuratively in the fortunes of the company.
Amazon stock has been on a tear since its February lows, up about 58% since then. It has recently consolidated, but there is plenty left in AMZN.
Analysts tend to tread carefully around AMZN stock because the company tends to spend all the money it makes on new ventures or expanding existing ventures, rather than piling up a big pile of cash, or offering a dividend. This remains a growth stock. And its price-to-earnings ratio certainly reflects that. It’s priced more like a hot tech company than a retail market leader with a $355 billion market cap.
Increasing market volatility will have its way with Amazon and it’s not exactly a ‘flight to safety’ kind of stock. But AMZN stock is one of the top growth plays in the world.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
