We recently compiled a list of the Top 12 Stocks to Buy According to Bourgeon Capital. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against the other stocks.
Bourgeon Capital Management LLC is an investment advisory firm headquartered in Darien, Connecticut. Founded in 1999 by seasoned financial professional John Aniblo Zaro, the firm specializes in actively managed, separate accounts with investment portfolios consisting primarily of stocks and bonds. In 2002, Bourgeon Capital expanded its leadership team when Michael Keohane joined SAC Capital to co-manage the firm’s long/short hedge fund. With a portfolio value of nearly $535.55 million by the end of December 2024, Bourgeon Capital is known for providing personalized investment strategies designed to manage risk while achieving long-term growth.
John Zaro, the firm’s founder and managing partner, has an extensive background in investment management spanning several decades. In addition to his Bachelor of Arts degree in Political Science and Economics from Stanford University, he is a Chartered Financial Analyst (CFA) and an active member of the New York Society of Security Analysts.
John Zaro’s career in finance has been marked by influential roles at major financial institutions; it began at Morgan Stanley Smith Barney LLC where he held the role of vice president from 1984 to 1991. Later, he served as a portfolio manager and vice president at J.P. Morgan Investment Management from 1991 to 1997 during which he managed substantial assets for clients. Just before establishing Bourgeon Capital, Zaro held the positions of Chief Investment Officer and Managing Director at Warburg Pincus Asset Management from 1997 to 1999. During his time there, he played a key role in shaping investment strategies for high-net-worth clients. With expertise in portfolio and alpha target management, Zaro was instrumental in refining investment processes for private clients and high-net-worth individuals.
With over two decades of experience, Zaro founded Bourgeon Capital with the vision of offering a more client-centric approach to wealth management. His goal has always been to foster strong, long-term relationships with clients through honest and strategic financial guidance. Bourgeon Capital continues to uphold this commitment, ensuring that each client’s investment strategy is tailored to their unique financial needs and aspirations.
In recognition of his accomplishments in wealth management, Morgan Stanley announced in 2022 that Zaro, then serving as a First Vice President and Financial Advisor at the firm’s Wealth Management office, was named to Forbes Magazine’s prestigious list of Top Next-Gen Wealth Advisors. This ranking evaluates candidates based on various qualitative and quantitative factors, including industry experience, leadership experience, assets under management, revenue trends, and compliance records. The selection process also incorporates insights gained from extensive interviews.
Bourgeon Capital’s investment philosophy is centered on achieving consistent, long-term returns while minimizing volatility. The firm prioritizes risk management by employing strategies that aim to reduce extreme market fluctuations. A key approach under Zaro’s leadership has been investing excess cash in the bond market to capitalize on higher interest rates. This strategy reflects the firm’s commitment to balancing risk and reward while ensuring that clients’ investments align with their financial goals.
Our Methodology
The stocks discussed below were picked from Bourgeon Capital’s Q4 2024 13F filings. They are compiled in the ascending order of Bourgeon Capital’s stake in them as of December 31, 2024. In order to assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A customer entering an internet retail store, illustrating the convenience of online shopping.
Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders as of Q4: 338
Bourgeon Capital’s Equity Stake: $15.08 Million
Amazon.com, Inc. (NASDAQ:AMZN) is a global technology powerhouse specializing in e-commerce, cloud computing, digital streaming, online advertising, and artificial intelligence. The company has diversified its operations through key subsidiaries such as Amazon Web Services (AWS), Zoox, Ring, Twitch, IMDb, Kuiper Systems, Whole Foods Market, and Amazon Lab126, strengthening its footprint across multiple industries.
Amazon.com, Inc. (NASDAQ:AMZN) demonstrated strong financial performance in Q3 2024, reporting $158.88 billion in revenue—an 11% increase year-over-year—slightly surpassing analyst expectations by 0.3%. Additionally, its earnings per share (EPS) reached $1.86, exceeding forecasts by 25.3%, underscoring its consistent profitability. With its dominant market position, continued expansion into high-growth sectors, and resilient financial results, Amazon.com, Inc. (NASDAQ:AMZN) remains a compelling stock for investors seeking both stability and long-term growth in the technology sector.
Italian authorities are investigating whether Amazon.com, Inc. (NASDAQ:AMZN) evaded 1.2 billion euros in value-added tax (VAT) that should have been collected from certain third-party sellers between 2019 and 2021. A law introduced in Italy in 2019 made e-commerce platforms responsible for VAT owed by non-EU sellers shipping goods to Italian customers, a regulation that preceded an EU-wide VAT reform in 2021. According to Italy’s financial crimes police, penalties could push Amazon’s total liability to as much as three billion euros. The investigation, launched in early 2024 and concluded in December, reviewed transactions that allegedly resulted in unpaid VAT. While Amazon declined to comment on the ongoing probe, the company emphasized its commitment to tax compliance and noted it had paid 1.4 billion euros in direct and indirect taxes to Italy in 2023. A preliminary investigation does not automatically lead to formal charges, but the case emerges amid broader discussions on trade relations, with former U.S. President Donald Trump proposing reciprocal tariffs against EU VAT policies.
Recurve Capital stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) – 5.1% of assets as of 12/31/2024
Amazon has been an agent of disruption for a long time in retail, cloud computing, and beyond. Its consumer business is incomparable for small parcel, general merchandise. Prime delivery windows keep shrinking, which keeps pulling more market share Amazon’s way. It has an amazing transportation, fulfillment, and logistics network capable of service levels that were unthinkable at current prices just a couple decades ago. Additionally, AWS is a leader in cloud verticalization, powered by proprietary semiconductors, hardware, software, facilities, and more. Amazon’s customer-centricity is the driving force behind its continuous innovation and disruption. As the juggernaut disruptor, it is likely the world’s best company at solving really hard problems for customers at massive scale.
Amazon does not trade at a mid-single multiple of medium-term FCF/share or EPS. Our cost basis was less than 10x our estimate of 2028 FCF. However, few companies reinvest at the rate Amazon does and, theoretically, it could double the free cash flow I model simply by moderating its reinvestments for a year or two – but that may not be a great outcome for long-term investors. This is why it is important to evaluate companies based on owner’s earnings, not reported earnings. For instance, a private owner of Amazon might shut down Project Kuiper and Alexa and massively increase EPS and FCF/share.”
Overall AMZN ranks 5th on our list of the stocks to buy according to Bourgeon Capital. While we acknowledge the potential for AMZN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.