What Makes Amazon a Smart Buy in the Current Valuation
Amazon has changed the way we buy things off the internet. The e-commerce giant is as vast as its namesake river of South America. Whenever Amazon enters a new market, it sends shivering fear to the local competitors. It has made many companies around the world go out of business.
However, Amazon (AMZN) lost a bit of shine in the US stock market when it posted an unexpected first-quarter loss. The next day itself, the stock corrected around 14%, the biggest since July 2006. But that didn’t stop Amazon from innovating itself into new segments.
Is Amazon’s current valuation suited for bulk purchases? Can Amazon regain its form and multiply the investment amount in the long run? Well, these are the things we will discuss in this blog. So sit tight and read till the end to know why investing in amazon can be a game changer.
Amazon’s Plan for Future Growth Drivers
Since the first quarter loss, Amazon has aggressively moved to new territories. It seems like the leadership group is no longer relying on the legacy business. Instead, they want to establish new high growth businesses that could help them regain their footing in the stock market.
Following are two new territories where Amazon is stepping in:
Live Sports and Entertainment
For the last few years, Amazon has invested heavily in its OTT platform Prime Videos. Amazon Prime Videos has been home to some of the world’s most popular sporting events in the last couple of years. It has brought exclusive streaming rights to Thursday Night Football in the US for a whopping $1 billion. Amazon has also streamed 20 matches of the English Premier League 2018-19.
AMZN has clearly set its eyes on being a media powerhouse. It has produced thousands of shows and movies in different parts of the world. For example, the show Mirzapur gained a lot of traction in India, which helped Amazon to gain new users for its prime membership.
Healthcare
US Healthcare is another sector where Amazon is trying to enter. It all began with Amazon’s acquisition of PillPack back in 2018. Since then, Amazon has been cautiously stepping into the healthcare sector. On July 29 this year, the e-commerce giant acquired One Medical for an estimated cost of $3.9 billion.
Amazon can now supply prescription medicine throughout the US. However, Amazon will face stiff competition from CVS Health and Walmart. So we’ll have to wait and watch how Amazon’s venture into the medical industry turns out to be.
These are only two sectors where Amazon has made heavy investments recently. Apart from this, the traditional business of e-commerce, advertising and cloud computing are there to generate big buck revenues.
Why Amazon is a Value Buy Right Now
Amazon has recently been on the buying list of investors throughout the world. But what makes Amazon a great stock to put your money? Let’s learn.
- Deep Correction: Amazon has corrected quite a lot from the highs of $188 a share. 37.76%, to be precise. Right now, the stock is trading in the range of $114-$117. This massive correction is caused by not-so-great performance in the first quarter.
- Pre-covid era Pricing: Amazon’s pricing has dropped to the pre-covid level. That makes the last two years of pricing movements a sideways one. So, there’s a potential to break the trend and reach the level of $200 anytime in the next few years.
- The Split Factor: On March 9, 2022, Amazon told the world that its board of directors had decided to split the shares in a 20-for-1 factor. The split will open opportunities for retail investors to participate in.
Why You Should Buy Amazon Stock from India
If you’re an Indian who fancies his chances in the securities market, you should definitely try your luck in the US stock market. And in the US market, Amazon might be the right stock for you to invest your hard-earned money. Here’s why:
- Amazon has an awesome track record. It has delivered 1700x returns since its IPO. This should be the biggest reason to trust a brand where you can put your money.
- The present economic slowdown has bought Amazon’s valuation to a decent level where you can invest bulk money for a long period of time.
- We don’t have any Indian company doing similar to what Amazon does. If you want to pick an e-commerce company for your portfolio, Amazon is your best bet.
With that being said, now let us tell you how to invest in US stocks from India.
How to Buy US Stock from India
If you want to invest in US stock while staying in India, you need to open a US trading account. You can choose both domestic and international brokerage firms. However, domestic brokers are the value-for-money option, given lower charges and brokerage fees.
One such domestic brokerage firm that deals in US stocks are Stockal. It is a simple, smart and secure platform that easily accommodates Indians to buy US stocks.
Stockal provides multiple ways of investing in US stocks from India. With Stockal, you’ll be able to buy:
- Direct stocks with minimal brokerage fees
- Mutual funds focused on the US stock market
- ETFs of US stocks and indexes
- Curated Stacks of US stocks made by experts
Final Thoughts
Before investing in Amazon, you should conduct your research and due diligence. Do not hurriedly enter into any stocks, including Amazon. Do some research and study the pricing for some time before putting your money in any company.
And if you feel the need to add a US firm to your portfolio, Stockal is the platform to go with. Sign up for free in Stockal and make the best investment choices now that could transform your offspring’s life in the future.
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