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Practical Advice from

Why Amazon.com Sees Groceries as Its Holy Grail

Courtesy Amazon

Most investors think Amazon.com, Inc. (AMZN) can do no wrong. This is a stance you should be suspicious of, just as you’re suspicious when people say a company with a track record of profit can suddenly do nothing right. I suggested buying AMZN stock on its recent earnings miss and the story had barely been posted before Amazon stock recovered. That’s a sign of a hot stock.

At its current level of about $851 per share, you’re looking at a 13% gain year-to-date, a 46% gain for the full year. The shares I bought in 2014, when they were at an average of $330, look like a very sweet deal indeed.

The company’s market cap, $404 billion, is the fifth largest and its 12-month gain is the best among the biggest stocks.

Now AMZN is planning to open brick-and-mortar stores, and sell fresh food. Should investors be suspicious? If recent news of a potential delay in the launch of its Amazon Go grocery store is any indication, the company’s ambitions will be more difficult to turn into reality. Reports indicate that AMZN is struggling to keep track of its customers and items in its test stores.

However, technical issues aside, Tom Caporaso, CEO of Clarus Commerce, which offers online merchants subscription and loyalty programs, told me that investors shouldn’t be skeptical of its objective to enter the grocery space.

Prices and data are from the original InvestorPlace story published on March 28, 2017. Click on ticker-symbol links in each slide for current prices and more.

SEE ALSO FROM KIPLINGER: Surprising Benefits of Amazon Prime

This slide show is from InvestorPlace, not the Kiplinger editorial staff.

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