3 Reasons I Backed Up The Truck On Amazon And So Should You

3 Reasons I Backed Up The Truck On Amazon And So Should You

Posted On November 7, 2022 2:56 am

Amazon plunged 23% after earnings, as cash flow estimates fell 27% due to higher costs and a weakening consumer.

Amazon’s long-term growth outlook fell from 32% to 19.2% CAGR, still better hyper-growth than any FAANG stock.

AMZN’s balance sheet is an AA-rated fortress with $60 billion in cash, $70 billion in liquidity, and a 0.55% fundamental risk over 30 years, and 68th percentile risk management.

AMZN growing at 8% to 13% has historically been valued at 28X to 31X cash flow and its long-term market-determined fair value range is 25 to 27.

Today Amazon trades at a 45% historical discount, 13.6X cash flow, and a 13.9X cash-adjusted PE. It could deliver 160% returns by the end of 2024, and 330% returns over 5 years, a 33% annual Buffett-style return.

I bought Amazon 5 times after its earnings crash and it remains one of the best Ultra Value Ultra SWANs on Wall Street today, as close to a perfect hyper-growth blue-chip opportunity as exists.

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About author

Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I'm a proud co-founder of Wide Moat Research, Dividend Kings, and the Intelligent Dividend Investor. My work can be found on Seeking Alpha, Dividend Kings, iREIT, and the Intelligent Dividend Investor. My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams and enrich their lives. With 24 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams and achieving long-term financial goals.

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