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Amazon.com is undervalued, even at all time highs, says fund manager

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David Burrows

Amazon.com is now trading at an all time high, but one fund manager says the stock has a lot more in the tank.

David Burrows, President and Chief Investment Strategist at Barometer Capital Management was on Market Call Tonight with host Mark Bunting to talk about his current top picks.

Burrows says if you want to participate in a space, buy the leader. In online retail, he says, Amazon is clearly that.

The Barometer Capital fund manager notes that Amazon has been growing at a compound annual growth rate of 30% over the past five years. Going forward, he expects the same kind of growth, nothing that the company’s international business is growing faster; at about 33%.

“The big knock has been they have spent money to become dominant, and the risk is that they continue to spend too much money, ” says Burrows. “But current estimates, going forward for 2014 say they will earn $3 a share,” he adds.

Shares of Amazon.com spiked this week after a judge ruled that rival Apple violated antitrust law by conspiring on e-book pricing. Investors are betting that Amazon will be the main benefactor of Apple’s setback. That development paired with news that client sales on Amazon.com leapt by 30.6% in June, following May’s strong growth of 25.8%.

At press time, shares of Amazon.com were up 1.52% to $304.21.

Click here for the full interview.

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About The Author /

Nick Waddell
Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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