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3 Retail Stocks Hiding in the Bargain Bin

These stocks might have fallen just enough to be worth buying

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Retail Stocks: Amazon (AMZN)

retail-stocks-amzn-stockKeeping with the theme of undervalued retailers, Amazon (AMZN) pops up as well.

Despite its long-term track record of outperformance, AMZN has hit a serious wall in 2014 as momentum has crumbled. Shares of AMZN stock are down more than 20% year-to-date, and investors are finally showing serious concerns about whether Amazon is committed to growing profits instead of simply growing sales.

But the reality is that simply growing sales is an impressive feat in this troublesome market.

Amazon has grown its revenue from $34.2 billion in fiscal 2010 to a projected $90.8 billion this year — an amazing 165% growth rate.

Furthermore, Standard & Poor’s analysts project $1.09 in earnings per share for fiscal 2014, and an even more impressive $4.24 projected for fiscal 2015. That still gives AMZN stock a pricey forward P/E ratio of more than 70, but shows the company — and Wall Street — expects significant improvement to the bottom line going forward, even if profits weren’t there in the past.

If you’re a longer-term investor, there is a lot of potential in Amazon stock. I’d feel comfortable buying this high-growth play at or a bit below $300 per share after the correction, with the expectation that growth materializes as planned — or even better than expected.

Jeff Reeves is the editor of and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at or follow him on Twitter via @JeffReevesIP

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