Picking stocks is like flipping a coin – and lately, it's been like flipping a double-sided coin. Things have become more difficult recently, particularly in the consumer tech sector. This is a good thing, though, because it means that the sector is doing well. But with many stocks maintaining value, there are many to choose from and it is difficult to differentiate between which one has more value. We obviously know the Apple's of the tech world are good. But after that, which stock is worth investment? Well, the answer may be easier than you think.
With its strong record of earnings per share and growth prospects in net income, revenues, profits and stock price, Amazon may just be a consumer tech stock worth consideration.
"Picking stocks is like flipping a coin."
Amazon, the giant
It may not be a get-rich-quick consumer tech stock and, certainly not one to sneak up on anyone, Amazon is still the king of e-commerce. The large-cap tech giant has leveraged its standing as an online retailer to become a cloud-computing company and media content firm, as well as a plethora of other innovative ventures.
Obviously, Amazon is still an online retailer above all things, as 66 percent of its revenue for the first quarter of the year came from retail sales. In fact, according to Canaccord Genuity research cited by Benzinga, 80 percent of all e-commerce traffic in the U.S. flows through Amazon. This is impressive because the research also showed that only 7 percent of global retail sales comes from e-commerce. Further proof of Amazon's dominance came from Cowen & Co.'s research, referenced by Bloomberg, which found that Amazon will actually become the top retailer for apparel in the U.S. by next year. Needless to say, despite some slight fluctuations – mostly seasonal sales shifts – Amazon has performed well recently. Right now it trades over 110 times its estimated year-ahead earnings, so you can imagine what lays ahead.
Amazon is the Google of e-commerce. But it's also trying to become the Google of Google with its best-in-class offline logistics operations and cloud systems offerings. Its innovation and dominance in the retail market are hard to replicate, which ensures that it will continue to be a market disrupter. The only thing to keep in mind with Amazon is that, occasionally, capital expenditures are made for long-term innovation, which can temporarily hit short-term profits. This is where the key to Amazon lays: Learn about their upcoming projects and try to pick the right time to buy if you're going to get in.