Click! You go on your computer to buy a book online. It’s the ‘Intelligent Investor’ by Benjamin Graham. It comes the next day. Amazon.com You turn on the tv. You are watching Prime Video. Amazon.com You go to a self-serve supermarket -Amazon fresh. You drink water from there. Amazon.com. It’all in Amazon.
🎵And I think to myself, what a wonderful company? 🎵
Let’s check now! :)
Stock Information
In case you’ve been living under a rock, Amazon is a gigantic company, engaged in many different industries: Retail, Video-streaming, Supermarkets, AI, chips, Books, print on demand, you name it.
That’s what I’m looking for. An ETF of a company. That is what a wide moat is. What is their market share? Let’s use my tool to find out:
Yes, a big market share is what we’re looking for. Let’s go on to see what their financial efficiency is like, compared to their competitors!
Financial Efficiency is a must in any analysis of a stock. It’s like a cup of cocoa on a cold winter day. You need it.
Probably a Sam quote from The Day after Tommorrow
Financial Efficiency:
This is a chart also from my tool, and you can see the areas that are better than the median (light green and dark green), as well as worse (yellow, light red and dark red). We can see Amazon has their three metrics in the dark green, showing us a great finanically efficient company compared to their peers!
Alright, now let’s move on to the profit margins, as the higher they are, the better.
This is yet another feature I’m working on - a breakdown of all their revenues exactly, so you see what the company earns - visually!
Amazon focuses on growth rather than cash now, hence the low net profit margin (8%), but high gross margin (almost 50%), implying a highly effective business model (think Visa):
Let’s move on to financial health! :)
Financial Health
Financial health is the most important part of every company’s analysis. Without it everything just falls apart.
Here it is (By me):
We can see that they have a minus net cash position, but don’t fear, as they have a net equity position. If they didn’t, then you can be sad, right now, don’t worry, be happy!
If you have any ideas on how to show complicated stock metrics easily, let me know, and I’ll try to create it! :]
Revenue growth
Based on their revenue, and net income, I can say that this company has a great growth trajectory! You can clearly see their Prime Day quarter, where their revenue is disproportionally higher. I like this kind of revenue growth.
Dividends & Buybacks
Yeah, they should teach us. -2.76% Buyback yield for Amazon. No didvidends, but don’t run away, as Jeff BEzos has an interesting philosophy, that he isn’t going to always please investors, but he’s going to sacrifice something for long term winning.
It's All About the Long Term. We believe that a fundamental measure of our success will be the shareholder value we create over the long term.
Actual Amazon quote
I like it.
Valuation:
Simplywall.st’s:
vs mine:
Bear in mind, that my is for 10 years, and also, that I’m a programmer, and I could’ve made a mistake :)
Conclusion
While it’s a great company, I don’t feel like being ready right now to buy it, but I will inform you if I do. For any growth investors, this is a really good company, with solid growth prospects.
Another laugh:
My old article (It’s so funny in hindsight):
Not financial advice.