Amazon.com Inc. (AMZN) is definitely my number one stock pick and the sooner you can grab it the better. In fact, as with all stocks, when you get in is just as important as when you get out for the simple reason that these two factors alone will determine the outcome of you holding that share.
Q: So why do I feel that AMZN stock is such a good buy?
A: I like to break up this answer into two parts.
- AMZN stock has recently just reached the $1000 milestone, in part due to their recent bid to acquire supermarket chain Whole Foods (Approx. 450 US Locations). If Amazon were to acquire Whole Foods it is inevitable that they would make a push to be included in the DJIA (Dow Jones Industrial Average) to compete head to head with opposing retail giant Walmart. I foresee this push for Amazon to be included in the DJIA to come sometime in Q4 (Holiday competition with Walmart is a factor). However, in order for Amazon to be included in the DJIA they would have to split shares (as Apple did when they joined). This takes us to part 2.
- Let’s say that Amazon does in fact acquire Whole Foods and attempts to join the DJIA to better compete with Walmart. AMZN stock, being as high as it is, will likely split anywhere from 6 for 1 to 8 for 1. If they were to split 6 for 1 the price of a single share would go from $1000 to $166. This is especially beneficial for individuals who get in BEFORE the company decides to split shares (This is precisely why I mentioned timing was important in my intro). When Amazon splits their shares and instantly becomes affordable for new, lower-level investors the stock price will rapidly surge. New, lower-level investors will feel more comfortable investing in a large name like Amazon and obviously the new affordable price will allow them to do so.
I feel that it is realistic to see an AMZN share price of $200 by Q1 2018 if the company was to go ahead with a 6 for 1 split while the stock is at $1000. For the two main points I discussed above, it seems to myself that Amazon is a definite buy and coming in a posting later this week I will discuss if you should sell and if so when?
Thanks for reading,
Ripple God