Amazon's acquisitions have transformed it from just a bookseller to a $531 billion giant while sending its stock price skyrocketing 386% over the last five years. But with a price tag of over $1,000 a share, some investors are turned away from buying the stock.
That's why we found a way for savvy investors to profit from Amazon's next purchases at a huge discount...
One share of Amazon.com Inc. (Nasdaq: AMZN) stock will cost you $1,097.81, which is why we have a backdoor investing strategy that lets you own a piece of AMZN for under $40 per share.
When Amazon makes strategic acquisitions, it sells more products and brings new customers into its "ecosystem." For example, it purchased Whole Foods in August for $13.7 billion and made more than 800 Whole Foods in-house brand items available for AmazonFresh customers to purchase, according to GeekWire.com.
Whole Foods customers who want the convenience of their groceries delivered can pay $299 per year for AmazonFresh.
And it's making Amazon billions of dollars...
Amazon reported its Q3 2017 earnings on Oct. 26, 2017, and revenue increased 34% year over year, to $43.7 billion, thanks to $1.3 billion in sales from Whole Foods. Amazon didn't break down how many Whole Foods customers may have signed up for Fresh, but the grocery service generated $90 million in sales in Q3, according to OneClickRetail.com.
Making $1.3 billion in sales in just a few months is impressive, but Amazon isn't taking a breather from its race to turn into the ultimate shopping destination...
In an Aug. 23 blog post, Foursquare (a location intelligence company) CEO Jeff Glueck predicted the next three companies that Amazon could buy using his company's proprietary data-driven insights.
What exactly is Amazon looking for in a takeover target?
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"Amazon prefers brands that foster an even deeper relationship with its current shopping base," Glueck said in the blog post.
We're going to show you which companies are next in Amazon's acquisition frenzy, plus how to profit from Amazon with this $40 investment...
This first company Amazon could buy is Nordstrom Inc. (NYSE: JWN).
Foursquare predicts Amazon could takeover JWN because Nordstrom customers are almost twice as likely to shop at a Whole Foods as the average consumer.
Amazon is also ramping up its efforts as a high-end clothing provider, as its European fashion division just launched a new line called "Find" on Amazon UK on Sept. 4. Owning JWN would instantly make Amazon a player in the luxury clothing market, a market they are wading into, just like with AmazonFresh and Whole Foods.
The second company Amazon could acquire in 2018 is the prescription-eyeglass retailer Warby Parker.
Like Amazon, the glasses company takes the hassle out of visiting a physical location to purchase a product through easy online ordering. Warby Parker has an app customers can order glasses from, and it even ships different frames for customers to try on at home for free.
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On top of that, prescription glasses start as low as $95, a draw for cash-consciousness consumers. The national average of eyeglasses is $196, according to health insurance company Vision Service Plan.
Foursquare's data also shows 80% of Warby's customers shop at Whole Foods. My guess is Amazon could add a Warby Parker in Whole Foods much like how Wal-Mart Stores Inc. (NYSE: WMT) have vision centers in its stores.
Glueck's final prediction using Foursquare data is Amazon could acquire Lowe's Companies Inc. (NYSE: LOW).
Glueck said in his blog post that Lowe's is more of a favorite with consumers than professional contractors, which is important for online sales. Contractors would be more inclined to visit a physical store to purchase supplies and tools, while a casual customer may feel more comfortable buying what they need online.
Foursquare data also found 43% of Lowe's shoppers are women, compared to rival Home Depot Inc. (NYSE: HD) shoppers being 39% women.
Women spend 20% more time shopping online than men, according to Get.com.
"All together, Lowe's seamlessly fits into Amazon's playbook," Glueck said.
Any of these acquisitions could add billions in revenue for Amazon, just like Whole Foods did, which has helped shares of AMZN climb 46.25% so far in 2017.
In comparison, the Dow Jones Industrial Average has climbed just 18.55% in that same time period.
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However, our backdoor strategy for investing in Amazon has netted shareholders market-beating gains of 37.10% so far in 2017.
And it costs just $40 a share.
Here's how to gain exposure to AMZN stock at a discount and stake your claim in the $528 billion e-commerce giant...
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The way to profit from Amazon for less than $40 a share is through Amplify Online Retail ETF (Nasdaq: IBUY).
IBUY holds a diversified group of publicly traded companies that generate 70% or more of their revenue from online or virtual sales.
Some of its most well-known holdings include Amazon, eBay Inc. (Nasdaq: EBAY), and Alibaba Group Holding Ltd. (NYSE: BABA).
As the AMZN stock price climbs, so will IBUY. Amazon accounts for 3.1% of IBUY's holdings.
But an additional benefit of owning IBUY is diversification. If Amazon ever has a bad quarter, you aren't stuck with just one stock that could make or break your portfolio.
With Amplify Online, you can gain exposure to three e-commerce giants, each with market caps over $30 billion. You can also own IBUY for a fraction of what a regular share of AMZN or BABA would cost you.
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And because the stock prices for AMZN, BABA, and EBAY are expected to go higher in the next 12 months, there could be even more gains on the way for IBUY shareholders.
According to FactSet, Wells Fargo projects the AMZN stock price will climb 30.25%, to $1,430, in the next 12 months. One unnamed analyst projects the BABA stock price will climb 28.27% to $245 per share in the next 12 months.
For the EBAY stock price, DA Davidson projects it will climb 20.03% in the next 12 months to $45 per share.
The Bottom Line: Amazon's acquisitions like Whole Foods made the company $1.3 billion in just one quarter. Foursquare projects Amazon could acquire Nordstrom, Warby Parker, and Lowes in 2018, which will make the company money directly through product sales and indirectly through services like AmazonFresh and Amazon Prime. But at over $1,000 per share, AMZN stock is expensive for the average retail investor. But through IBUY, investors can own a piece of AMZN for under $40 and still profit as the online retail giant makes more money through its strategic acquisitions.
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