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As more and more businesses sell their online sales and consumers opt for digital stores rather than physical stores, global ecommerce sales are expected to grow from $ 2.8 trillion to $ 1.5 trillion. last year to $ 4,900 billion in 2021. And with the increasing development of e-commerce, this creates enormous investment opportunities.
To help you choose some of the best ecommerce titles, we asked three Motley Fool contributors to choose their best choice to buy now. here's why eBay (NASDAQ: EBAY), JD.com (NASDAQ: JD), and Amazon (NASDAQ: AMZN) at the top of their list.
Source of the image: Getty Images.
Consider this underrated online market
Steve Symington (eBay): With as much attention as companies like Amazon.com commissioned by investors, it's easy to forget all the other companies that are making waves in the field of e-commerce. But shares of the initial online market have skyrocketed after the strong results of the first quarter of 2019 last month.
That's not to say that the eBay title numbers were amazing at first glance. Quarterly revenues edged up 2.4% to $ 2.643 billion, while adjusted earnings rose 10.9%, even more impressive, to $ 608 million. Thanks to ambitious share buybacks in the past year, of which 42 million shares were bought back for $ 1.5 billion in the first quarter, adjusted earnings per share rose 26%, to reach $ 0.67.
But eBay's most promising investments in next-generation payment and advertising solutions are perhaps the most interesting. As part of a multi-year initiative launched early last year, eBay traded a gross merchandise volume of $ 220 million during the first quarter solely on its market platform, up 61% from compared to the previous quarter. More than 800,000 active sellers also promoted more than 200 million listings in the first three months of 2019, each generating an average visibility gain of 36% and collectively generating additional revenue of $ 65 million. dollars.
As these initiatives continue to grow, eBay will also benefit from improved earnings and results. Combined with a recently initiated dividend that yields around 1.6% at current prices, it's only a matter of time before the rest of the market realizes what an outstanding market represents on eBay.
This Chinese e-commerce titan really should not be so cheap
Anders Bylund (JD.com): The Chinese e-commerce giant, JD.com, is in a desperate situation – at least if you measure the health of the company by the performance of its actions. Stock prices have fallen 28% in the last 52 weeks and JD shares are trading 42% below their annual highs. Investors can purchase the stock at an affordable value of 9.6 times the free cash flow.
At the same time, JD has absolutely crushed Wall Street earnings forecasts in the last two quarterly reports. Sales turnover has been growing at an average annual rate of 37% over the past three years. The company is not only profitable, but also an efficient ATM machine. During fiscal year 2018, JD converted 4% of its inbound revenue into free cash flow.
The stock is cheap, but not because the business of JD is losing momentum. Instead, investors punish this symbol as Washington and Beijing soften their macroeconomic muscles in a trade war loaded with tariffs. In addition, CEO and founder Richard Liu was charged with badual misconduct last fall and is now facing a civil lawsuit by the alleged victim.
The trade war is not a joke, nor is the CEO scandal. However, Sino-US relations will surely have to normalize at a given moment and JD will remain at this time an important center of online shopping, ready to recover from the low consumer spending triggered by this conflict. China. And although Richard Liu has been instrumental in guiding JD on the current trajectory, his hand-picked lieutenants should be able to support the company if the founder was forced to leave the CEO's office for legal reasons. JD can not be run by a ham sandwich, but the C suite bench team has excellent qualifications and years of experience in managing this operation.
As a result, JD sales seem excessive and low prices should not last longer. The end of trade wars will drive up stock prices. The end of Richard Liu's legal problems – by regulation, dismissal or any other type of verdict – will also remove a dark cloud that hangs over this management team. And of course, JD will likely continue to exceed Wall Street expectations pending the arrival of these other trigger events.
JD.com is a theft, an agreement, and it's an irreproachable purchase at these prices.
Why shop when you can choose the American leader?
Chris Neiger (Amazon): In terms of e-commerce in the United States, nobody is at the top of the list: about 47% of online sales in the United States will be on the platform of Amazon this year. Not only does Amazon account for nearly half of all online sales, but the four biggest online retailers in the United States together account for only 16% of the market.
If Amazon derives operating profits from its cloud computing division called Amazon Web Services, its e-commerce segment dominates sales. During the last quarter, the combined sales of the company's US and international e-commerce grew by 14% over the previous year and accounted for 87% of total business revenue.
Some investors are worried about the slowdown in Amazon's revenue growth over the last four quarters, but it's unlikely that we're worried in the long run. Amazon has built its dominance of e-commerce with fast and free delivery for its premium members, who tend to spend more on the company's website. Add to all this the dominance of the group on cloud computing and the recent growth of advertising sales. This e-commerce stock is getting better.
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