This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Sell Apple, Buy Amazon

Stocks in this article: AAPL AMZN

Deny it all you want, but Wall Street discounts Apple because it has much less confidence in leaders not named Steve Jobs. If I had a say in the company's succession plan (enter the following half-serious, half-hyperbolic statement), it would have been to spend as much of the company's cash as necessary to hire Jeff Bezos away from Amazon.com. Investors have confidence in Jeff Bezos.

Up until the past three months or so, Apple has largely outperformed Amazon. But that's in the past. While it can be comforting to live there, the approach often does not end well for investors.

While bulls lament Wall Street's refusal to tag Apple with a frothy valuation, Amazon more than maintains its ambitious P/E. And the stock tends to do a better job of establishing highs and sustaining them. Don't get me wrong, it's volatile and it has its share of ups and downs, but you will hear few complaints from Amazon longs that the market is holding the stock down.

Throw out everything you thought you knew about the P/E ratio. It's old school, outdated and useless to measure a company's "valuation" with it. Valuations no longer mean much, if anything at all. The P/E ratio is a gauge of investor confidence. Does this company have the pieces in place to not only sustain and maintain, but achieve continued hyper growth over the long-term?

Despite all of the faux uncertainty bears try to cook up at Amazon, the situation there, with Jeff Bezos steady at the helm for more than a decade, provides plenty more answers than it does questions. Can you honestly say the same about Apple?

At the time of publication, the author did not hold a position in any of the stocks mentioned.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs