They're
generating about 50X as much income as AMZN.
And about infinitely times as much profit <g>
Our investment club (which recently bought BGP) did a look at AMZN, just for fun. Their sales now are $640 mil. Suppose in 5 years they go 10 times that, to 6.4 bil. Suppose they do after tax profit of 15%, which they won't -- profits then of 960 mil. Present shares out about 135 mil; therefore EPS of $7. Suppose a P/E of 40. That gives a price of $284, less than double the current price in 5 years, which you can get off a garden variety growth stock with actual earnings. And that assumes a) they can multiply sales 10x in five years, b) can get after tax 15%, which they won't, c) that they will get a high P/E, which they might well, and, most important, d) that they can finance all this growth with NO additional shares issued.
Me, I'm happy with BGP. And I keep wondering when it's time to short AMZN. |
