Brief Amazon thought

Hello there,

I started investing recently and go long only, hence try to choose those securities that have a potential over the next 30-40 years ideally.

I have noticed on this sub that many people are quite sceptical about Amazon and their PE of 200+.

However, I have looked at their report (Dec 2016 is the most recent one) and I thought it would be wise to also consider their net capital growth in addition to net income.

Example:

In 2016 their net income was $2.37bn, which constituted to $5.01 per share (hence the PE).

However, they also got a net capital gain of about $17bn ($20bn assets -$3bn liabilities).

In my view, that is another $17bn of ‘real’ income, which is 7 times more than the net income figure.

Therefore, would that be fair to say that the PE (capital gain adjusted) would then be 7 times less, hence circa 30? Not theoretically of course but as a common sense fact - that $17bn capital growth should not go unnoticed.

Hence my point that Amazon is a great long investment.

Thanks for your opinions.

Submitted March 14, 2018 at 06:16AM by roskalov http://ift.tt/2FBqIwH