How Much Is It To Buy Amazon Stock
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how much is it to buy amazon stock
Valuing Amazon stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Amazon's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
Amazon (AMZN 1.26%) stock looks expensive today, trading at more than $3,000 for one share. That's enough money to buy about 15 shares of PayPal, 20 shares of Walt Disney, 26 shares of Apple, or 58 shares of Coca-Cola. Where should you put your money?
While $3,000 seems like a hefty price for one share of stock, the number of shares you buy isn't what really matters. For example, Apple executed a 4-for-1 stock split in August. For each share worth about $500, shareholders received four shares worth about $125 each. While it may be easier to purchase shares that cost less, if you had $500 to invest in Apple, it didn't matter if you bought one share before the split or four shares after -- it was worth the same amount of money and had the same growth prospects over time.
Similarly, if you don't have $3,000 (or more these days, since Amazon stock is trading for $3,204 as of this writing), you may not want to consider Amazon, even though you can buy fractional shares. But if you do have that much money to spend, the fact that you'd be buying one share as opposed to several shouldn't deter you.
One reason to look elsewhere would be diversification, or put simply, not putting all of your eggs in one basket. If all of your money is in one stock, your risk of losing it is heightened. Diversifying your stock portfolio, or holding a range of stocks in different industries, hedges the risk of any of them underperforming. It also gives your money more ways to work for you.
Beginning investors can get blinded by hype, and putting a lot of money into a high-growth company may seem enticing. But a mixture of high growth and value stocks, or low- and high-risk stocks, is a better way to succeed as an investor.
Amazon stock is up 73% year to date, as the pandemic sent more and more shoppers online and Amazon rose to the occasion. If you would think of putting $3,000 into any one company, buying one share of Amazon is an excellent choice.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, Apple, PayPal Holdings, and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, long January 2022 $75 calls on PayPal Holdings, and short January 2021 $135 calls on Walt Disney. The Motley Fool has a disclosure policy.
If the stock has more business risk, then you might choose an even lower percentage than this range. However, Amazon is a well-established business with a top management team, and while the stock price may fluctuate, the fundamental business is solid and growing.
With dollar-cost averaging, investors add a set amount of money to their position over time, and that really helps when a stock declines, allowing them to purchase more shares. High-flying stocks like Amazon can dip from time-to-time, so the strategy can help you achieve a lower average buy price and higher overall profits.
On Wednesday, the company said that its board had approved a 20-for-1 stock split. The move means if you already own Amazon stock, you'll receive 20 shares for each single share you own, and if you don't own Amazon stock, you'll be able to buy it at a much lower price.
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"We wouldn't use this as any reason by any stretch to buy the stock nor would we ever use a stock split announcement as a reason to become incrementally more positive on the stock," Paul Hickey, co-founder of Bespoke Investment Group said on CNBC after Amazon's announcement.
However, if you've had your eye on Amazon stock, the split would allow you to buy shares at a lower price. And Amazon is an investment Bespoke likes for the long-term, as the company has shown time and time again that it's able to go into different sectors and be successful, Hickey said.
Amazon is "absolutely a good buy right now," says Morningstar Senior Equity Analyst Dan Romanoff. The stock is one of his "top picks," thanks in part to its advertising business and Amazon Web Services. Amazon's Prime recent price hike also underscores Amazon's pricing power, Romanoff wrote in a research note following Amazon's most recent quarterly earnings report in February. The firm estimated Amazon's value at $4,100 per share, meaning that it sees the stock as currently undervalued.
The stock split is a good thing for investors, he says, as it means retail investors can get in on the action without forking over the nearly $3,000 they would need to buy a single share of Amazon today.
Amazon.com, Inc. (NASDAQ:AMZN) stock spiked 16.3% from its 3-year lows of $81.43. This was caused by general market trends, as the S&P 500 (SP500) consolidated above the important level of 4000 points, as well as positive news for investors about cost optimization.
Amazon.com (AMZN (opens in new tab)) stock has had a terrible 2022, but Wall Street says the e-commerce and cloud-computing (opens in new tab) giant is positioned for outsized returns next year.
J.P. Morgan analyst Doug Anmuth reminded clients of that fact on Monday, calling Amazon stock one of the research firm's best ideas for 2023. The analyst reiterated his Overweight (the equivalent of Buy) recommendation on AMZN stock, as well as his price target of $145.
Of the 52 analysts issuing opinions on AMZN stock tracked by S&P Global Market Intelligence, 34 call it a Strong Buy, 15 say Buy, two have it at Hold and one calls it a Sell. That works out to a consensus recommendation of Strong Buy, which is a fairly rare honor on the Street. Only 24 stocks in the S&P 500 receive a consensus recommendation of Strong Buy (opens in new tab), per S&P Global Market Intelligence.
In other words, if you buy Amazon stock at current levels, you're getting the retail business essentially for free. True, AWS and Amazon's advertising services business are the company's shining stars, generating outsized growth rates. But retail still accounts for more than half of the company's total sales.
More basic valuation metrics tell much the same story with Amazon stock. Shares change hands at 54 times analysts' 2023 earnings per share (EPS) estimate, according to data from S&P Global Market Intelligence. And yet AMZN stock has traded at an average forward P/E of 75 over the past five years.
Paying 30-times expected earnings might not sound like a bargain on the face of it. But then few companies are forecast to generate average annual EPS growth of more than 30% over the next three to five years. Amazon is. Combine those two estimates, and Amazon stock offers far better value than the broader market.
No, the company's problems won't fade away overnight. But the selloff in Amazon stock does give patient investors (opens in new tab) a chance to buy a top-rated name at a deeply discounted price, bulls contend.
"Amazon likely faces a few challenging quarters, but continues to have a strong portfolio of assets," writes Argus Research analyst Jim Kelleher, who rates shares at Buy. "We believe that the lagging performance provides an opportunity to establish or dollar-cost-average into positions in AMZN stock, which remains the undisputed category leader."
Investors should also consider their investment goals, including the amount and length of the investment. A long-term investment horizon of at least five years should enable investors to smooth out the returns from any downturn in stock markets.
Founder and CEO Jeff Bezos opened the virtual doors of Amazon's online store in July 1995. The company was incorporated in 1994 in the state of Washington and reincorporated in 1996 in Delaware. The Company's principal corporate offices are located in Seattle, Washington. Amazon completed its initial public offering in May 1997, and its common stock is listed on the Nasdaq Global Select Market under the symbol AMZN.
Amazon went public on May 15, 1997, and the IPO price was $18.00, or $0.075 adjusted for the stocks splits that occurred on June 2, 1998 (2-for-1 split), January 5, 1999 (3-for-1 split), and September 1, 1999 (2-for-1 split), and June 3, 2022 (20-for-1 split).
On March 9, 2022, Amazon announced a 20-for-1 split of common shares, effective on June 3, 2022, for stockholders of record on May 27, 2022. Tax information related to this stock split can be found here: Form 8937.
Amazon's transfer agent is Computershare, and can be reached at (800) 522-6645. Registered stockholders (including those who hold physical stock certificates) should contact Computershare in the event of a name change, a change of address or if their certificate has been lost or stolen. Additionally, if a registered holder has not received notification of the availability of our proxy statement and annual report in advance of the Annual Meeting, Computershare is the appropriate contact.
After reporting quarterly earnings on Thursday, AMZN stock sank about 4.5%. The giant beat on revenue, but missed on EPS and provided light guidance. Most notable to the media and many investors alike, the titan missed on net sales in its cloud division ($21.3 billion actual versus $21.76 billion expected). 041b061a72