Amazon.com, Inc. (NASDAQ:AMZN) rarely fails to impress. Whether you’re a shareholder or a fan of disruptive tech, founder and CEO Jeff Bezos never leaves you disappointed.
AMZN has always gone its own way — where most online retailers are happy to pile up the profits and increase margins, Amazon plows its revenue back into new ventures.
This has hurt the stock over the years, particularly when the company swings and misses or the economy slows down. That’s why it usually carries a triple-digit price-to-earnings ratio. When revenue slows, investors scramble for the exits because there’s not a big rainy-day fund of cash sitting around at AMZN.
But the amazing thing is, Amazon isn’t like Babe Ruth — home run and strike out king — it’s more like Ted Williams, one of the greatest hitters to every play the game.
Ted Williams’ consistency was so stunning that even Warren Buffett built his trading philosophy around Williams’ batting philosophy. Basically, it’s about finding your sweet spot and then sticking with it.
Bezos has continued to innovate and disrupt using the tools he has around him. For example, Amazon.com had to have massive amounts of data storage to process and maintain orders, logistics, etc. and do it in a hyper-secure way. It was a pretty simple step to see the value in renting excess storage out to other companies. And so, Amazon Web Services was born — and is one of the company’s major growth engines in recent years.
Bezos was the first retailer to talk about delivery drones. When he said it on 60 Minutes a few years ago, it sounded absurd.
Absurd no longer.
More Tailwinds for AMZN Stock
Two other major opportunities for AMZN moving forward are in logistics and, ironically enough, brick and mortar retail.
Amazon.com’s business is all about shipping. And up to now, AMZN has used the logistics companies that exist — United Parcel Service, Inc. (NYSE:UPS), the US Postal Service and FedEx Corporation (NYSE:FDX) in particular.
But now that it’s looking to build out same-day delivery of groceries and other items, it is in the process of building its own logistics company. How this will all come together is still speculation, but there’s no doubt it will happen and create a major disruption in the logistics business.
It has also built a pilot store that is the prototype for its Amazon Go concept. Now available only to AMZN workers in Seattle, it is a small sandwich shop where there are no checkout lines.
You get your food and drinks and walk out — your phone is linked to the Amazon Go app and it sends a receipt to your phone and deducts the money from your Amazon account.
This ‘frictionless’ shopping has massive implications beyond simply serving consumers in Amazon Go shops. Again, this will be massively disruptive to current app payment models as well as retail shopping in general.
All this while still going gangbusters with the businesses it already has spinning.
It’s no surprise that AMZN is up almost 370% in the past five years. But five years from now, these levels will look like the good ol’ bargain days.
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.
