3 Stocks That Could Put Amazon's Returns to Shame
Matthew Frankel, Neha Chamaria, and Matthew DiLallo, The Motley Fool
July 10, 2018
Since 2000, e-commerce giant Amazon.com's (NASDAQ: AMZN) stock has risen by a staggering 2,070%. That's an annualized return of about 18.7%.
While there's no way to know for sure which stocks will become the next Amazon, three of our contributors think BofI Holding (NASDAQ: BOFI), XPO Logistics (NYSE: XPO), and iQiyi (NASDAQ: IQ) have pretty good chances.
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The next entertainment giant
Matt DiLallo (iQiyi): Chinese entertainment streaming company iQiyi has been incredibly volatile since its IPO earlier this year. Shares initially surged as investors piled into what many are calling the "Netflix of China" before trade-war fears cooled some of that enthusiasm. That tug of war between promise and pitfalls will likely continue in the future. However, when it comes to stocks with the potential to deliver Amazon-like returns, iQiyi is one of the few where the market opportunity seems to match the hype.
While billed as China's Netflix, iQiyi thinks more of itself as an "online Disney" because it makes as much money on advertising as it does on subscriptions. Either way, the numbers are awe-inspiring. At last count, the company had about 61 million paying subscribers, which is almost half the size of Netflix at 118 million. Meanwhile, more than 540 million people currently have the iQiyi app installed on their mobile devices, with more than 420 million of them using it each month. While those users might not be paying for iQiyi's services, their eyeballs are quite valuable to advertisers.
The company hopes to grow the more lucrative subscription business by creating exclusive content for subscribers. It's taking a unique approach by using artificial intelligence to determine the right content to develop. This strategy has already proven successful since the company has produced many of the top internet shows in China. With it just scratching the surface, iQiyi certainly has the potential to deliver amazing returns.
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