Amazon.com (AMZN - Free Report) CEO Jeff Bezos has topped the recently announced Forbes 2018 Billionaires list for the first time. Microsoft founder Bill Gates and Oracle of Omaha, Warren Buffett, ranked #2 and #3, respectively, rounding of the top three.
Per Forbes, Bezos’ is the only person in the list with a 12-figure fortune, up $39.2 billion from 2017, the biggest one-year gain in the list’s history. As of Feb 9, Bezos’ wealth stood at $112 billion.
Amazon shares hit a 52-week high of $1,542.13, closing a tad-bit lower at $1,537.64 representing almost 1% growth from the prior trading sessions.
Shares have returned 80.7% in the past year, significantly outperforming the industry’s rally of 66.5%. Notably, the company has a market capital of $565.84 billion.
Momentum to Continue
We expect share price momentum to continue in 2018 driven by robust top-line growth. The company is benefiting from an expanding Amazon Web Services (“AWS”) customer base. AWS generates much higher margins than retail, thus positively impacting Amazon’s profitability.
Moreover, increasing number of paid Prime members is positive. The company is gaining from strong growth in the retail business, which remains very hard to beat on price, choice and convenience.
We note that Amazon has a solid loyalty system in Prime and its FBA strategy and content addition continues to add selection to Prime memberships.
Diversified Footprint — Key Catalyst
Amazon’s ubiquitous presence in retail is commendable. The acquisition of Whole Foods has helped it to rapidly penetrate the grocery segment of the brick-and-mortar stores. The company’s foray into the brick-and-mortar stores market has become a concern for conventional retailers like Walmart.
Moreover, AWS has strong growth prospect in the Infrastructure-as-a-Service (IaaS) segment of the cloud computing. Digital assistant Alexa and the Echo devices are also expanding presence in the home automation and Internet of Things (IoT) market.
Recently, Amazon has started offering healthcare services in a partnership involving JP Morgan Chase (JPM - Free Report) and Berkshire Hathaway with the stated objective of lowering healthcare costs for everyone over the long term.
Further, Amazon is reportedly eyeing the lucrative financial services sector. The company has been widely rumored to launch a product similar to traditional checking accounts in collaboration with JP Morgan Chase and Capital One.
Zacks Rank & Stocks to Consider
Currently, Amazon carries a Zacks Rank #3 (Hold).
PetMed Express (PETS - Free Report) and Stamps.com (STMP - Free Report) are stocks worth considering in the same sector. Both the stocks sport Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for PetMed and Stamps.com are currently pegged at 10% and 15%, respectively.
Breaking News: Cryptocurrencies Now Bigger than Visa
The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.
Zacks has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.
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