Amazon (some random thoughts)
Amazon is a monster, behemoth, the generational no-brainer investment for my lifetime. By every metric I trust, it says to buy, hold, buy more on dips, hold, etc.
Take a look:
This is the breakdown on FinvizElite: Its hard to see but here are some highlights-
EPS grew 335% this year and is set to grow 39% and 61% over the next year and 5-years respectively. EPS Quarter over Quarter grew 116% with Sales Q/Q up 17%.
The EPS graph in the middle left of the screenshot is pretty amazing; EPS in 2014 was -0.52 per share, in 2015 +1.28, in 2016 +5.00, and in 2018 +20.36! It looks like they can just turn their earnings on like a spigot.
It continues to get better...The Sales graph in the middle shows the trend there. No explanation needed. Sales are growing.
The third graph is Shares Outstanding. Notice how much discussion there has been and continues to be made regarding share buybacks by companies to artificially boost their EPS and "manipulate" the market? Well, AMZN's Shares Outstanding over the last 5-year have actually grown from 462M to a little over 490M. No buybacks here to stimulate EPS. And just imagine when they do start to repurchase...Holy mackerel .
Now read this description of the company and what they do: (again provided by FinvizElite)
Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS) segments. It sells merchandise and content purchased for resale from third-party sellers through physical stores and online stores. The company also manufactures and sells electronic devices, including Kindle e-readers, Fire tablets, Fire TVs, and Echo devices; provides Kindle Direct Publishing, an online service that allows independent authors and publishers to make their books available in the Kindle Store; and develops and produces media content. In addition, it offers programs that enable sellers to sell their products on its Websites, as well as their own branded Websites; and programs that allow authors, musicians, filmmakers, skill and app developers, and others to publish and sell content. Further, the company provides compute, storage, database, and other AWS services, as well as compute, storage, database offerings, fulfillment, publishing, digital content subscriptions, advertising, and co-branded credit card agreement services. Additionally, it offers Amazon Prime, a membership program, which provides free shipping of various items; access to streaming of movies and TV episodes; and other services. It serves consumers, sellers, developers, enterprises, and content creators. Amazon.com, Inc. has a strategic partnership with Volkswagen AG. The company was founded in 1994 and is headquartered in Seattle, Washington.
If those aren't the most fingers in some really big pies, then i don't know what beats it.
They sell merchandise to consumers, publish original literature/art, make and sell electronic devices, cloud services, produce television and movie content, Amazon Prime (which has apparently taken over the United States in about 3 years time) at a $100/year for more than half of all American households...That's just going to continue being a cash cow, and its only getting started.
You will be hard pressed to find such a safe, relentless growth story, and with a massively established infrastructure.
I joke with people that Amazon is what will become the real version of "Big and Large" from Pixar's movie Wall-e. I love that movie and feel this is actually a somewhat possible path for Amazon in some weird way. Bezos has his own space program "Blue Origin" which could slide its way into this whole picture some day as well.
The way I see it, it is going to be awful tough for this one to fail. Of course anything is always possible, but if I have to pick, I'd prefer an established company (the largest in the world in fact) that has grown EPS by 400% in the last 3-years, is expected to grow by 61% over the next 5-years, and is taking over most aspects of our consumer lives.
I don't say it lightly that I would buy/hold a stock blindly. That is not my game at all. But with Amazon I feel it is worth the small chance that they fail for the potential boundless upside in the unforeseeable future.
I will continue to use my Peter Lynch glasses to watch how consumers interact with the company; as of now I see countless packages delivered daily (I generally receive 1 to 3 packages per day personally), their original television content is winning awards, they continue to diversify and streamline their offerings in all areas (including shipping technology), Warren Buffett's Berkshire Hathaway has recently made a substantial purchase in the company, etc.
They appear unstoppable and destined to grow continuously. I honestly think when we look back in 30-years we will see that AMZN was the easiest and clearest long-term investment of our lifetimes.
Disclosure: I currently hold 10% of my liquid net worth in AMZN shares and will continue to average my cost over time. We are also Long AMZN for our Managed Client Accounts.