Amazon.com, Inc. (AMZN)

The proverbial story of valuation versus fundamentals. This is really a killer in its categories of online retailing and Cloud services. However, it is not cheap. You are looking at 25 to 28 times cash flow. They have a fair bit of growth to achieve in the next little while to come into that valuation. He would prefer looking at this in 2 parts, online retailing and Cloud services, so would suggest maybe looking at Microsoft, which has been growing its share in Cloud services. A cheaper stock and pays a dividend.

(A Top Pick Jan 26/16. Up 39.56%.) Likes the Amazon Echo with Alexis, versus Apple’s Siri. They also produced the movie, Manchester by the Sea. Also, announced that they just bought some cargo ships, meaning they are getting into freight shipping. They are crushing everybody.

Seasonality on this is very different than the average retail merchandising US company. He is not even sure of the seasonality. Looking at the technicals, the stock is going in the right direction. The longer-term trend is on the upside. The shorter term trend is still even stronger to the upside. On a relative basis, the stock is very, very strong.

The fact that it has made all these vast investments in infrastructure, they have very little debt. They continue to grow like mad. Moving into India and internationally. They may not be making any money because they are reinvesting the money in growth. It is hard to find good management that is fearless. In 2006, they were using an incredible amount of computer power. Decided to overinvest in computers, and rent out computer space, and are now the largest Cloud computer company globally. (Analysts’ price target is $945.03.)

Has a lot of respect for this company. There is no sharper entrepreneur that has done more in the last decade than Jeff Bezos. He is wiping out whole swabs of the retail space. On this one, don’t use PE, but instead use Price to Sales as a valuation. On that basis, it is far more reasonable.

An incredible story, but from a valuation perspective it is incredibly expensive. They dominate online retail spending and no one is coming close. The big box stores are having a really hard time competing on an online basis. The money coming from Amazon’s cloud business AWS is really subsidizing the retail side of it.

This is the biggest winner of all the stocks out there. This is the first question he has ever had on this stock in 17 years. Don’t hold your breath on stock splits. The CEO does not believe in them.

(A Top Pick Nov 14/16. Up 4.28%.) This is a pretty good trend. Every time it comes down to the bottom of the trend line, you want to pick some up. For the long run, this is a great stock to own.

It marches to its own drummer. Management is considered a genius. They are slowly but surely taking over online shopping. He likes to look at revenue growth rather than profits with them. He does not own it because of a lack of visibility, however.

Trading at almost 80-90 times earnings. You have to take a lot of volatility with the stock, because the earnings multiple is so high. From a broader perspective, they have $138 billion of sales, so they dominate the online business. AWS, their cloud business is 1^st or 2^nd relative to Microsoft (MSFT-Q). They have some really great businesses. You need to own this, because they will become a very big competitor to a lot of retail companies, and will dominate retail over the next 10-15 years.

They are reportedly in talks to buy a Dubai based online retailer SOUQ.COM for $1 billion. That would be peanuts for them. This is an amazing company that has grown from zero to revenues of over $100 billion. He has no idea how to value this company, and therefore he can’t buy it. They are generating all of their growth through their own free cash flow generation. An unbelievable operation, growing in the Cloud.

His long-term thesis on this is very bullish. They are dominant in Cloud and in retail. In the very short term, it has been used as a source of funds for people who under-owned financials. Financials is the most under owned sector in the market. He would have no problem holding this.

Trump is not what to be nervous about with this one. The disruption would be how in the US you don’t pay sales tax on something bought out of state. They are an incredible company that is in all kinds of areas. But it trades at nose bleed levels and you might not be comfortable owning it at these levels.

No Dividend. Cloud computing is a strong grower. The Alexa device will allow you to yell at it that you need something and it will be delivered in one day. The web services are a huge growth engine. (Analysts’ target: $940.37)

He would have a hard time advocating buying or owning this, based on its valuation and its ability to generate cash. They are doing a phenomenal job of owning a lot of businesses, but are doing it by spending a lot of money and not generating a lot for shareholders. Valuations are pretty nosebleed territory.