One stock to buy right now

Analysts have many different opinions on what stocks are better to buy now, but they agree on one. This is Amazon! Let’s see what makes it so attractive for investors.

Defense

The market sentiment is unpredictable and quite volatile. One day it’s up, another – down. So, that’s reasonable to buy a stock, which stays resilient in times of the market uncertainty. Let’s look at the performance of Amazon during the coronavirus outbreak. The stock dropped more than by 20% at the beginning, but then it rebalanced faster than other stocks. Moreover, Amazon gained on the stay-at-home regime as consumers started to buy more online and businesses expanded their cloud operations through Amazon Web Services. Since the COVID-19 vaccine hasn’t been developed so far and lockdowns have been eased, there is still a high possibility of the second round of infections. Taking into consideration this risk, Amazon is the best stock to buy with its proven resistance to economic downturns.

Strong economic moat

What is an economic moat? This concept was created by the most successful investor Warren Buffet. In short words, this term reveals the competitive advantage of the company in the long run. To have a strong economic moat, the company should have

a cost advantage – to deliver or produce their goods or services at a low cost to win their competitors on prices;
the network effect – the value of a good or service grows as more people use it;
high switching costs – to make it expensive for a customer to switch from one product or service to another;
a brand recognition – a well-known brand name can charge a premium for its goods.

We can put all pluses to Amazon. It has a cheap delivery, the ever-growing user base and Amazon Prime. Once a consumer joins this program, it becomes a privileged member, who enjoys free delivery and exclusive access to music, movies and TV shows. After this, most people stay with Amazon forever.

Numbers speak for themselves

Amazon showed 23% year-over-year revenue growth and 41% earnings growth in the first quarter of 2020. It’s a 1.3-trillion-dollar growth machine. The company is really diversified as it involves in almost all high-profitable spheres such as e-commerce, cloud services and even healthcare. That makes it the top stock to buy right now.

fundamental analysis

stocks market

FBS Analyst Team

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