The stock market offers few guarantees. For example, we’re never going to know when a stock market crash or correction will rear its head, how long it’s going to last, or how steep the decline will be…
But history has clearly shown that if you buy high-quality businesses and hang on to them for a long time, you have a very good chance to build wealth. This means there are always opportunities to make money, regardless of whether the stock market’s major indexes are near a new high or contending with a steep correction.
As we move headlong into June, three top stocks stand out as exceptional values. Buying them now could make you richer in June, and well beyond.
Sometimes the best stocks are the biggest. After all, publicly traded companies don’t achieve a trillion-dollar valuation because of luck. They’ve earned their title as one of the world’s largest businesses because of their competitive advantages and operational execution. That’s why e-commerce giant Amazon (NASDAQ:AMZN) is one of the three top stocks to buy for June, and beyond.
If you buy goods online, there’s a pretty good chance you’re familiar with Amazon. The company’s online marketplace controls 40.4% of all e-commerce sales in the U.S., according to an April report from eMarketer. That’s $0.40 of every $1 spent online routing through Amazon.
The thing is, retail sales as a whole generally produce low margins. Amazon gets around this by using its popularity to push Prime memberships. The fees that Prime members pay help it to undercut brick-and-mortar retailers. Additionally, Prime members tend to spend a lot more annually than non-Prime shoppers, and they’re very loyal to the company’s ecosystem of products and services. In total, it has more than 200 million Prime members worldwide.
And it’s not just retail sales where Amazon has been dominant. Amazon Web Services (AWS), the company’s cloud infrastructure segment, is an absolute beast in the cloud data storage space. Despite the worst economic downturn in decades last year, AWS’ sales grew by 30%. As of the first quarter, AWS had an annual run-rate of $54 billion in revenue.
You’ll want to pay close attention to AWS because cloud-service margins absolutely run circles around retail margins. Even though AWS accounts for around an eighth of Amazon’s total sales, it’s often generating well over half of its operating income. Thus, AWS is the company’s leading driver of operating cash flow.
As the icing on the cake, I’ll note that Amazon ended every year between 2010 and 2019 at a multiple of 23 to 37 times its cash flow. Given AWS’ immense growth, Wall Street is expecting Amazon’s cash flow will more than double by 2024 to $314 per share. Put another way, the company is valued at roughly 10 times Wall Street’s projected cash flow in 2024 after trading at a median multiple of 30 times operating cash flow last decade. That’s a big-time bargain!
A smart way to get rich is by putting your money to work in trends that offer double-digit growth potential for a very long time. That’s why cybersecurity stock Ping Identity (NYSE:PING) gets the nod as a top stock that’ll make you richer in June and beyond.
Once optional, cybersecurity has transformed into something of a basic-need service. We were already witnessing a steady shift by businesses online and into the cloud prior to the pandemic. But when the coronavirus hit in full force, it coerced companies to go remote and entrust protecting their data to third-party providers. That’s where Ping Identity comes in.
As its name gives away, Ping is focused on cloud-based identity verification. The company’s intelligent cloud platform relies on artificial intelligence to grow smarter over time at identifying and responding to threats. In many instances, third-party cloud providers are more efficient and cost-effective than on-premises security solutions.
To be blunt, Ping Identity struggled a bit in 2020 as many of its cloud-based cybersecurity peers thrived. With some of its customers choosing shorter-term subscriptions, it temporarily slowed sales growth. But if you dig deeper, you’ll find a…
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