What are the 5 Best Stocks to Buy Right Now?

3. Amazon.com, Inc. (NASDAQ: AMZN)

Number of Hedge Fund Holders: 243     

Amazon.com, Inc. (NASDAQ: AMZN) is a Washington-based technology company that primarily runs an ecommerce business. It is ranked third on our list of 10 best stocks to buy right now. The company’s shares have returned 5% to investors over the past year. In earnings results for the second quarter, posted on July 29, the firm reported earnings per share of $15.12, beating market predictions by $2.80. The revenue over the period was more than $113 billion, up 27% year-on-year but missing estimates by close to $2 billion. 

On July 30, investment advisory Stifel maintained a Buy rating on Amazon.com, Inc. (NASDAQ: AMZN) stock with a price target of $4400, underlining that the firm was undergoing a transition phase and would emerge stronger out of it. 

Out of the hedge funds being tracked by Insider Monkey, London-based investment firm Citadel Investment Group is a leading shareholder in Amazon.com, Inc. (NASDAQ: AMZN)  with 3.3 million shares worth more than $10.5 billion.  

In its Q1 2021 investor letter, Hayden Capital, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ: AMZN) was one of them. Here is what the fund said:

“Amazon (AMZN): We sold our last remaining stake in Amazon this quarter. Amazon was our longest-running investment holding, after having originally purchasing it at the inception of Hayden in 2014, at a price of ~$317.

I gave some details of how Amazon has progressed over these past 6.5 years in last year’s Q2 2020 letter, which partners can find here (LINK). The company has executed amazingly well over this tenure, with revenues up ~3.3x and since our initial purchase, and reported operating income up ~30x over that period.

Generally, I believe there are three reasons to sell an investment: 1) we recognize our initial thesis is wrong (sell out as quick as possible), 2) we have a significantly higher returning opportunity to redeploy the capital into (sell-down to fund the new investment), or 3) the company is maturing and hitting the top part of it’s S-curve / business lifecycle, so the business has fewer places to reinvest its capital internally. As such, the future returns will likely be lower than the past. This investment thus becomes a “source of capital” in the future, as we fund earlier-stage investment opportunities… (Click here to see the full text)