Amazon.com, Inc. (AMZN)

It's the ultimate disruptor. We all use Amazon a lot more. He watches this stock closely. Could this be a dip and a time to buy? Trump's anti-Amazon tweets are just noise. There's a lot going on in the tech world and Amazon will benefit.
173X forward earnings, and that's likely why he doesn't own it.

He thinks Amazon is a great company but from a value investing perspective, it is not a great stock. He would not bet against this company, but he thinks it will take a long time for the earnings to catch up.

It has a forward PE of 147 times and a price to book of 23. This company is a great disruptor. They are radically changing the whole retail scene. It recently broke out to a higher valuation level. It is a company that simply does not quit. He would be careful, however, because it is so expensive. If it breaks through $1300 then it means the growth arc is over. It has survived bear markets in the past.

He wrote a blog on FANGs. Basically he noted that a lot of these stocks moved a lot over their 200 day moving averages. He thinks they are overbought by 10% over. This one was 37% over the 200 day. He thinks it will return to its trend line. It is so overbought that it could drop more. $1100 or $1200 is a screaming buy.

(A Top Pick Jan 19/17, Up 70%) It will continue to make people money. Don't put too much stock in what Trumps says. Amazon is growing rapidly and profitably. Its assets and sales keep rising tremendously every year, but not its debt. It reinvests its money in business opportunities. Will move into healthcare, advertising and content creation (Amazon Prime Video), and even banking. Delivers value.

(A Top Pick June 20/17, Up 60%) Continues to love it. Still needs to put all its cash back to work like the Whole Foods acquisition. Will definitely hold it. A very rich valuation, so he limits his holding to 3%.

He prefers to make his call based on the 5-year chart. It has been in a healthy up channel, but he thinks it is over-bought. It will likely correctly down soon. The double-top in the Nasdaq could also signal a pause in the price strength. Be patient.

It trades at a very high multiple. Amazon is only 20% of the online business and there's lot of global growth for it. Buy the dips. They're expanding quickly into many areas. Good and bad: Jeff Bezos reinvests all the revenues in trying new areas--he's innovative. He's made strategic acquisitions like Whole Foods. Also, there's a whole generation that wants to--and will--do everything online.

Is there a chance for a stock split? He owns this and thinks the split will be coming in the next year or two. He bought it last Christmas after shopping for family on their system – purely on gut feel. They are only scratching the surface on their distribution play. This should be in your portfolio for the next 20 years. Longer term there is risk if their position becomes too dominate.

He does not own this, but wishes he held an early position in this incredibly well-run company. The multiples are just too hard to wrap his head around. If he held it, he would protect his initial investment (take money off the table) and let the rest run.

[Amazon makes up 25% of the S&P]: These stocks have a successful track record for a period, but it comes down to valuation. Amazon barely makes a profit if it does at all. Their game is market share at any cost. Eventually, if you can't make any money, what are you doing there?

He thinks it is easy for them to gain market share when you are not making any money. At some point governments will intervene to bust this company up as it is becoming dominate in too many spaces. At some point smart retailers will find ways to differentiate themselves to battle back against the company.

It is richly valued and it is difficult to model the downside of momentum stocks like this one. The company’s web services business provides a basis for estimating the value and risk of the company but does not represent enough of the total business. She will not buy it because it does not fit in with her investment approach.

Fabulous company, but is it a fabulous stock? He still can't accept the stock price. You're paying a lot of money based just on cash flow. Can Amazon continue to grow and dominate at this rate? Okay, they are good at what they do. He doesn't own it. Doesn't like the valuation.

Alibaba (BABA-N) or Amazon (AMZN-Q)? You can buy both and he would. Don't use multiples to under valuations, but rather look at invested capital. Estimates 15-20% return on invested capital for Amazon. Alibaba is equal if not slightly better than Amazon. 18% ROIC. Loves both, but would slightly prefer Alibaba.