Best Stocks for 2019: Amazon Stock Can Still Go Viral

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Editor’s note: This column is part of our Best Stocks for 2019 contest. The Readers’ Choice pick for the contest is Amazon (NASDAQ:AMZN).

Best Stocks for 2019: Amazon Stock Can Still Go Viral

All right, so Amazon hasn’t exactly been blazing any trails in the first quarter of 2019’s contest — it currently sits in fourth place, in fact. But take heart, because A. there are still three quarters to go and B. It’s not like a 19% gain through nearly three months is anything to be ashamed of.

The great thing about getting to write about Amazon for this contest once per quarter is that the company does so much that there’s always something new to write about. Sometimes it opens a cashierless convenience store. Sometimes it buys an entire grocery chain.

It’s always interesting to revisit and see what AMZN stock has in store for me now.

AMZN Stock and the Brick-And-Mortar Boogeyman

A big piece of news for AMZN stock investors this quarter was that Amazon is closing its 87 pop-up brick-and-mortar locations. Some experts worried that this showed an inability to compete in the physical store arena. However, the closing locations — mostly located inside malls and other stores — were probably never intended to be permanent.

In other words, don’t stress too much about this if you’re an investor. Amazon is still looking to open more of its standalone stores, including more Amazon Books stores and Amazon 4-Star locations. Its physical-store aspirations are neither down nor out.

Speaking of physical locations, another big piece of news for Amazon in the quarter was the news that it will be opening more grocery stores. And no, these aren’t more Whole Foods locations, This is a new chain that AMZN stock is planning to start in Los Angeles by the end of this year.

What do we know about these stores? Not much, so far. There are some leases in place, and a few early points in a timeline whose full scope is murky. We don’t even know what they’re going to name this new venture.  But at this point, would you want to bet against the commerce juggernaut of the internet age?

Financially, things are still ticking along. For the fourth quarter, AMZN stock reported revenues rising to $72.4 billion, a gain of 20%. Income gained more than 50% on the quarter, to $3 billion from $1.9 billion year over year. Its cloud arm, AWS, continues to post 40%-plus growth. And perhaps most importantly for a company like Amazon, free cash flow for the trailing 12 months reached $19.4 billion.

At that point, AMZN stock risking a bit on a new grocery venture or its own new brand of skin care products hardly seems like a real risk at all.

As of this writing, Jessica Loder did not hold a position in any of the aforementioned securities. 

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