Should you forget Amazon stock? Why These Unstoppable Stocks Are Better Buys

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Investors have been impressed by its resilience. Amazon. Despite its massive scale, with e-commerce, cloud computing and more recently, Artificial intelligence (AI)

However, with Market value Now at more than $2.3 trillion, it is approaching a point where high-percentage growth will become more difficult. Therefore, investors may want to consider other consumer-oriented stocks that can easily convert market potential into fast growth. The following two stocks have the potential to generate higher returns than the e-commerce and cloud giant.

In fact, the number 3 energy drink in the market is not an obvious place to look for a superior stock. However, investors should do a thorough investigation Celsius (NASDAQ: CELH ). It stands out by marketing itself as using natural ingredients. This approach has helped him gain a following among health enthusiasts.

After signing the distribution deal, the sales levels were also overpaid. PepsiCo. That increased availability by allowing outlets like Amazon and others. Costco To sell more energy drinks.

Unfortunately, distribution problems have caused the stock to fall more than 70% from last year’s highs, as a major distributor, likely PepsiCo, has significantly reduced orders.

However, the distributor will probably adjust the order size accordingly in the future, making this issue less of a factor. In the first three quarters of 2024, sales of $1 billion are expected to grow 5 percent. While this is dramatically slower than the 104% annualized growth in the first nine months of 2023, it still represents an increase.

Additionally, international purchases will account for only 5% of Celsius’ revenue in the first nine months of 2024. Still, sales in the Europe and Asia-Pacific regions grew by 38% in the first nine months of the year. Given the growth potential of these markets, overall sales growth should improve as the company’s North American markets account for a significant percentage of its sales.

Additionally, the decline in stock prices has taken its P/E ratio to 41, a level that is in line with multi-year lows. Assuming overall sales growth can at least keep pace with global growth rates over time, Celsius stock will likely bounce back from recent supply disruptions and continue its march higher.

Alternatively, if investors prefer Amazon to outperform within its own industries, they may want to turn to the company widely known as the “Amazon of China.” Alibaba (Nise: Baba).

Although Alibaba is not vulnerable to the US, fears of another trade war with the US have weighed on shares of China-focused companies. In addition, the slowdown in China’s economy, combined with a fine of 3.8 billion dollars due to regulatory violations from 2021 to 2023, significantly affected its reserves.

However, considering Alibaba’s performance, one has to wonder if the sales pitch is overstated. The stock is down 75% from its all-time high in 2020 and down 10% from its IPO in 2014!

That decline left the P/E ratio at just 17, much lower than Amazon’s, which trades at a significant multiple of 48 times earnings. Also, with Alibaba’s forward P/E ratio of just 10, investors may not be fully aware of its potential growth.

Indeed, one could argue that Alibaba has become cheap for a reason. Revenue for the first six months of fiscal 2024 was $68 billion, a 5% gain from a year earlier. This is the year That’s a dramatic reversal from the same period, when annual revenue growth was 31 percent in 2021.

Still, net income for the first six months of 2024 was about $10 billion, up 13 percent from a year ago. So, even with a more muted growth rate, Alibaba’s profits appear to be growing fast enough to warrant a rock-bottom forward P/E ratio. If negative sentiment around Alibaba eases later in the year, that factor alone could fuel rapid price growth.

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John McKee, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the Motley Fool’s board of directors. It will be healing. It has locations in Celsius. He has a spot in the Motley Fool and recommends Amazon, Celsius, and Costco Wholesale. The Motley Fool recommends Alibaba Group. The Motley Fool has Disclosure Policy.

Should you forget Amazon stock? Why These Unstoppable Stocks Are Better Buys Originally published by The Motley Fool.

2025-01-11 16:50:00
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