Love Amazon.com, Inc. (AMZN) But Hate Its Valuation? Gain Exposure With These 3 Stocks Instead: Corning Incorporated (GLW), Microsoft Corporation (MSFT), Dolby Laboratories, Inc. (DLB)

Page 1 of 2

Amazon.com, Inc. (NASDAQ: AMZN) is a great company, and I use their online store and services frequently. The stock is a different story. With a forward P/E of around 72, negative EPS robbing it of a P/E (TTM) ratio, and no dividend- it isn’t exactly my kind of stock. I also realize that many look at the company’s tremendous growth potential and are willing to pay for it: especially as a long-term investment. I have seen many an argument over the future of Amazon. While it is hard to invest in Amazon without buying Amazon, there are companies that help make up various components of Amazon’s tablet/e-reader- the Kindle Fire HD. Without getting into the whole bear/bull case, these are some companies that may piggyback off the success of Amazon’s Kindle tablet, giving investors who are weary of the stock’s valuation an opportunity to get some exposure to the company with less risk.

The screen

Amazon’s Kindle Fire, like many high-end tablets, utilizes Gorilla Glass manufactured by Corning Incorporated (NYSE: GLW). For every Kindle produced, Corning makes the display glass. Corning is cheap with a P/E ratio of around 10.6 and even cheaper when considering its forward P/E ratio of only around 9.5. Corning has a solid balance sheet as well, with over $3 billion in cash when subtracting debt. Not only that, the company is also trading below its book value. How much cheaper can they get? As an incentive for patient investors, Corning also offers a dividend yield slightly above 3%.

Operating system/search

Microsoft Corporation (MSFT)

The Kindle Fire runs on Android, the OS owned by Google Inc (NASDAQ:GOOG). The default search engine, however, is powered by Microsoft Corporation (NASDAQ: MSFT). This directs mobile traffic away from Google search and into Microsoft Corporation (NASDAQ: MSFT) Bing. Although users can technically switch search engines, most will likely decide to just use the default silk browser which uses Bing. This may also help open up Microsoft Corporation (NASDAQ: MSFT) Bing to more third parties. Microsoft Corporation (NASDAQ: MSFT) is currently priced at around 15 times earnings and pays a solid 3.4% yield.

Audio

The Kindle Fire HD is the first tablet to offer Premium sound provided by Dolby Laboratories, Inc. (NYSE: DLB). Amazon has incorporated Dolby Digital Plus sound into the Kindle Fire, giving it an edge in the audio quality department when compared to most other tablets. Dolby getting into tablets, and mobile devices period, is what they need for growth and continued relevance in the shifting technological landscape. The company is priced at around 14 times earnings, and is extremely strong financially with no debt and a current ratio of a little over 4.

Why the Kindle Fire?

The Kindle Fire may soon have its own currency- Amazon Coins. Not only is the digital currency a way to encourage developers, but it will also offer an easy way for customers to purchase apps, in-apps, and Kindle Fire games. According to Amazon’s vice president of apps and games, Paul Ryder (in reference to Amazon Coins):

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!