Before I ever recommend the stock, I want the company to report growth in both sales and net income on a consistent basis. I would much rather have a consistent amount of growth, even if it is just 8%, then to have quarters where the company misses earnings, then beats earnings, then misses earnings. The company’s mobile strategy isn’t self-sustaining or sustainable yet, so investors should look for alternative investment opportunities.
Two alternatives you would want to pack on the trip
Google Inc (NASDAQ:GOOG) will continue to grow its advertising revenue because of the increasing adoption of Internet usage across the world. Microsoft estimates that the number of Internet users will double by 2020 to 4 billion people. Google Inc (NASDAQ:GOOG)’s advertising business (Google AdSense and AdWords) will continue to grow based on the increasing number of Internet users. Going forward, investors should also anticipate an increase in the amount of revenue generated from the Android Play Store.
Source: Statista
Digital advertising is projected to grow in the double digits for 2013 and 2014. The growth could accelerate based on an improving European economy in 2014. Going forward, investors could earn a reasonable rate of return by sticking with Google. Analysts on a consensus basis anticipate Google to grow earnings by 14.9% per year, which is a pretty reasonable rate of growth.
Amazon.com, Inc. (NASDAQ:AMZN) could be another compelling investment alternative. Global e-commerce sales are on the rise, and I see no reason why investors wouldn’t want to participate.
Source: Statista
According to eMarketer, it is estimated that the business-to-consumer e-commerce market will grow by around 17% in 2013. The total buyer penetration for worldwide online e-commerce will increase to 40.4%. The growth in sales will primarily be driven by the Middle East and Africa at 31%, Asia-Pacific at 23.1%, and Latin America at 22%.
Some of the greatest limiting factors to online e-commerce are online banking and payment-technology services offered by Visa Inc (NYSE:V) and Mastercard Inc (NYSE:MA). Another problem is access to the Internet; by 2020 these issues will be alleviated to a certain extent as there will be 4 billion Internet users by then.
Visa Inc (NYSE:V) recently released Visa payWave, which allow the average user the ability to buy something using their smartphone device. The great thing about it is that the emerging market will be using a larger number of smartphone devices in the immediate future, which will directly translate into more e-commerce purchases (Amazon will benefit greatly from this). Visa is projected to grow sales by 12.5% in 2013 and 11.1% in 2014.
Going forward Amazon.com, Inc. (NASDAQ:AMZN) will be an effective growth investment. Analysts on a consensus basis anticipate the company to grow earnings by 37.1% per year over the next five years.
Conclusion
It would be wise to wait until Research In Motion Ltd (NASDAQ:BBRY) establishes a consistent track record of earnings growth. For now, investors would do best to avoid the stock. In the meantime, both Google and Amazon seem like the best growth investment vehicles based on the underpinning economics of both businesses.
The article BlackBerry: Worst Stock of the Year originally appeared on Fool.com.
Alexander Cho has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Google, and Visa. The Motley Fool owns shares of Amazon.com and Google. Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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