Some find Amazon.com’s (Nasdaq: AMZN) stock too expensive now, but plenty believe it still has lots of room to grow. Remember, too, that the stock has long been called overvalued, while it has averaged double-digit gains for many years.
So what will fuel the company’s growth in coming years? Amazon keeps entering new markets and building on existing ones, such as with its Pantry packaged goods business, set to launch this year. The company generates about 40 percent of its revenue internationally, and its operations in emerging markets such as China and India offer great potential.
Amazon continues to gain market share in its relatively high-margin third-party business, signing up more merchants and reducing shipping times by placing more fulfillment centers near major U.S. cities. It’s a significant player in cloud computing, too, and its Kindle business has been quite successful. Amazon’s “Prime” service, with more than 20 million members, includes video streaming and is a threat to Netflix. There’s even speculation that Amazon.com could become a major smartphone seller.
As more consumers across the globe do more of their shopping online, Amazon and its shareholders are positioned to benefit. It’s not a stock for the risk-averse, but you might want to consider adding at least a few shares to your portfolio. (The Motley Fool owns shares of Amazon and Netflix and its newsletters have recommended both.)
Ask the Fool
Q: If I can’t pay my taxes on time this year, what should I do? – G.N., online
A: Whether you pay on time or not, be sure to file your return on time. Failing to file leads to stiffer penalties than simply underpaying. Meanwhile, you do have some options, which the IRS itself lays out at its IRS.gov website.
For starters, you can call the IRS at (800) 829-1040 to request a brief extension. You can also submit an Online Payment Agreement application with the IRS, which may permit you to set up an installment payment plan. Offline, submit Form 9465 or call the number above to see about an installment plan.
Paying by credit or debit card is also possible, but it’s not a smart move if the debt is going to remain unpaid for a long while, racking up interest charges at perhaps 20 percent or more annually. (Note that credit card service providers will also charge a “convenience” fee, which can be rather inconvenient.)
Your bank might loan you money, too, possibly charging you less than the IRS’ interest and penalties.
If you receive a bill from the IRS, don’t disregard it, as it could make your problems worse and might lead the IRS to take collection action. To minimize penalties and interest charges, pay as much as you can on time and pay the rest as soon as possible.
Q: Is it too late for me to refinance my mortgage? – K.R., Detroit
A: Rates have been inching up over the past year, but they’re still very low. Depending on your current mortgage’s interest rate and some other factors, refinancing may still be a profitable idea. Learn more at fool.com/how-to-invest and bankrate.com.
My dumbest investment
As a total newbie, I invested in a stock based on news announcements, which more careful reading would have shown me came from the company itself. It bragged about a new tablet, and then announced a 3-D printing acquisition and a new CEO with experience in 3-D development.
I finally sold the shares for around $0.04 each. The company isn’t even on the main stock exchange. So, live and learn. It was a cheap lesson. (Thank heavens that my brokerage charges only $7 per trade.) – D.W.R., Bellevue, Wash.
The Fool responds: Ouch. That stock has fallen to $0.03 per share now. Stocks trading for less than about $5 per share are penny stocks – notoriously volatile and risky. It’s fine to read information supplied by a company, but collecting outside opinions is valuable, too, as is studying its financial statements, looking for actual profits and growth.