We recently published a list of Top 10 Stocks to Buy According to Sustainable Insight Capital Management. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against other top stocks to buy according to sustainable insight capital management.
Sustainable Insight Capital Management (SICM) focuses on institutional investments, offering both long-only and long-short strategies in public equities. Established by an experienced leadership team with deep institutional knowledge, the hedge fund is committed to providing investment solutions that emphasize sustainability. As of the fourth quarter of 2024, SICM reported managing nearly $228.52 million in 13F securities, with its top 10 holdings making up 56.36% of its portfolio.
Kevin Edward Parker is the founder and Chief Executive Officer of Sustainable Insight Capital Management LLC, which he established in 2013. He also founded Sustainable Insight Capital Management (UK) Ltd. that same year and serves as its CEO as well. Parker earned his undergraduate degree from New York University in 1981. With over 30 years of experience on Wall Street, he has built a distinguished career in investment management and financial leadership. Before launching SICM, Kevin Parker played a key role at Deutsche Bank, where he was a member of the Group Executive Committee from 2001 to 2004 and led its asset management division as Global Head from 2004 to 2012. His extensive expertise in sustainable investing and institutional asset management has positioned SICM as a leader in responsible investment strategies.
Beyond his work at SICM, Parker holds several leadership positions in various organizations. Since 2004, he has also served as Vice Chairman of the New York Police & Fire Widow’s & Children’s Benefit Fund. Additionally, he has been an Independent Director at The Westaim Corporation since 2020, an Independent Non-Executive Director at United Co. RUSAL International PJSC since 2019, and a Director at both Next Jump, Inc. and Westaim Arena Holdings II LLC since 2016. His previous roles include Chairman of the Management Board at DWS International GmbH from 2011 to 2012 and a Director at the Sustainability Accounting Standards Board from 2014 to 2018. He has also held leadership positions at Agri. Capital Group SA, DB Climate Change Advisors, and Green Partners Technology Holdings GmbH.
Our Methodology
The stocks discussed below were picked from Sustainable Insight Capital Management’s Q4 2024 13F filings. They are compiled in the ascending order of Sustainable Insight Capital Management’s stake in them as of the fourth quarter of 2024. In order to assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1008 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 363.5% since May 2014, beating its benchmark by 208 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
SICM’s Equity Stake: $14.70 Million
Amazon.com, Inc. (NASDAQ:AMZN) is a global leader in technology, excelling in e-commerce, cloud computing, digital streaming, online advertising, and artificial intelligence. Its diverse portfolio includes major subsidiaries such as Amazon Web Services (AWS), Zoox, Ring, Twitch, IMDb, Kuiper Systems, Whole Foods Market, and Amazon Lab126, allowing the company to expand its presence across multiple industries.
Amazon.com, Inc. (NASDAQ:AMZN) showcased strong financial growth in Q4 2024, reporting $187.79 billion in revenue—a 10% increase from the same quarter of the previous year—while slightly surpassing analyst expectations. Its earnings per share (EPS) of $1.86 exceeded projections by 25.3%, reinforcing its consistent profitability. With its dominant market position, ongoing innovation in high-growth industries, and robust financial performance, the company remains an attractive investment. Its ability to drive revenue across various sectors while maintaining long-term stability makes it a top choice for investors looking for both growth and resilience in the tech industry.
Morningstar increased Amazon.com, Inc. (NASDAQ:AMZN)’s fair value estimate to $240 per share, up from $200, following strong fourth-quarter results. Despite currency-related revenue challenges and rising capital expenditures, the company exceeded expectations, with revenue growing 10% year-over-year to $187.8 billion. AWS and advertising, two key drivers of long-term growth, expanded by 19% and 18%, respectively. The company’s operating profit reached $21.2 billion, surpassing projections, while its margin improved to 11.3% from 7.8% a year prior. With $101.2 billion in cash and $52.6 billion in debt, its financial position remains solid. Free cash flow is expected to normalize as previous investments in infrastructure and content balance out. Amazon.com, Inc. (NASDAQ:AMZN) continues to enhance efficiency through robotics and its multi-hub strategy. The company’s leadership in e-commerce, cloud computing, and advertising, combined with consistent financial growth, makes it a compelling stock. Its strong fundamentals and market dominance suggest a sustained long-term value for investors.
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 4th on our list of top stocks to buy according to sustainable insight capital management. 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.