Hi Denny, I discussed that in my Mid-Quarter Review of Amazon in February, post #16723, http://discussion.fool.com/amzn-my-mid-quarter-review-32125155.a…
Hope you find it useful,
Saul
Yes, thank you. I’m not used to using cash flow to value stocks. I get a ratio of Price/Cash-flow of 24 and I don’t know if that is good or bad. On the other hand, Price/Sales (Yahoo) of 2.61 is pretty good.
I have Amazon on my fast growth wish list and it is very enticing. Bezos’ business model has been working very well for two decades and I see no reason for it to stop. I like off price retail very much because there are more poor than rich, the ongoing global economy is squeezing working wages, and the Fed is screwing savers and pensioners with NIRP and ZIRP policies forcing people to become more frugal.
My calculated AMZN growth rates:
**Years Rate**
15 27.9%
10 31.6%
5 25.4%
I’ve calculated that a ten bagger in ten years is the equivalent to a CAGR of 25.9%. Only 12 stocks on my list have 20 year growth rates of 25% or more topped by AAPL (Apple) and 20 have 15 year growth rates of 25% or more topped by MNST (Monster Beverage).
One issue with AMZN is that the stock price is so high that I can’t apply my options strategy to it (one contract would need almost $60,0000. But at such a fantastic growth rate it might as well be a buy and hold position. I’m going to have to work out a plan to accumulate it.
Thanks again,
Denny Schlesinger