This Discounted Stock Is the Cheapest It's Been in Years
When you think of discounted stocks, Amazon (NASDAQ: AMZN) probably doesn't come to mind. But, if you take a hard look at the company, that's exactly the case. Still, a stock's valuation isn't the only consideration when deciding whether a stock is a buy.
With that in mind, should you take a position in Amazon just because the stock looks cheap? Or are there other factors at play that investors must understand?
First, we need to understand what makes Amazon undervalued. There are multiple ways to value a stock, whether it's the price-to-earnings (P/E) ratio, price-to-sales (P/S) ratio, or some other metric. Over the past year, Amazon hasn't been consistently profitable, so the P/E ratio shouldn't be used.
Source Fool.com
