4 Reasons I Just Bought More Amazon Stock

I've owned Amazon (NASDAQ: AMZN) for several years and recently bought more shares. Some people assume a high-flying growth business like Amazon can't be undervalued because it has a big valuation relative to its current earnings and cash flows. But what really matters is the future cash flow stream. I think Amazon shares reflect modest long-term expectations for that cash flow stream relative to what I think is likely. Here's why.

For all the talk of Amazon's dominance, the company's e-commerce business still has a very small share of retail sales. Over the last 12 months, Amazon has generated $171 billion of net sales in its retail business.

However, Amazon's net sales include its sales to customers but only the commission it earns on sales by third-party sellers on its platform. So a more accurate measure of all value of all goods sold on Amazon is gross merchandise volume (GMV), which includes both sales volume directly from Amazon itself and from third-party sellers on Amazon's marketplace.

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Source Fool.com