Top Five Best Stocks to Buy at 2021..2-Amazon (AMZN): $4,000 is the target

Coronavirus has created a monster in Amazon and probably sped up what was going to happen in a few years anyway: the death of the high street or bricks-and-mortar retail in the US. Amazon is now the global high street, shopping mall and discount outlet combined.

In recent weeks it has decided to go after the pharmacy business and is still only getting started in online groceries. It has so much cash at its disposal that the mere mention of a new business area sends share prices of existing established stocks in that area into panic mode.

 

Diversification

AMZN is probably the most diversified business available to investors.

 

AMZN is a tech company, a pharmacy company, a food retailer, a Netflix and Apple competitor, AMZN cloud services, the list goes on. It is the perfect defensive stock, growth stock and value stock rolled into one!

 

The high P/E of AMZN (94 at the time of writing) is often cited as a reason not to buy AMZN.  But compared to some of its tech peers recently this now looks cheap. Tesla’s P/E is 1298, yes I know right! AMZN has justified its always high P/E, in 2016-2018 AMZN’s P/E averaged around 200, the stock price went from $800 to $1200 and onwards. AMZN’s P/E peaked at 272 in 2017 and as earnings have lived up to expectations it is naturally coming down with wall street estimating it to drop to 34 by 2023.

AMZN has not suffered from antitrust issues so far that befell its predecessors such as Microsoft, Facebook, Twitter, etc. It has ambitious plans to take over the pharmacy space, grocery retailing and deliveries. It is one of the biggest cloud companies with Amazon web services accounting for nearly two-thirds of AMZN’s profit and over half of AMZN revenue. International has a huge scope to add to AMZN’s profit in the future, with only 7% of operating income coming internationally. It has now started to focus on this with Q3 2020 showing a $407m profit versus a loss Q3 2019.

To be continue

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