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TheStreet Open House

Invest Like a Venture Capitalist With These 5 Stocks

Stocks in this article: AMZNNGDOTDATAFB

Amazon.com

Last up is Amazon.com (AMZN), a name that seems surprising to find on VCs' love list. After all, AMZN isn't some high-growth upstart -- it's the biggest retailer in the world by dollar volume, and it sports a market capitalization of $192 billion.

Still, VCs own 79,000 shares of this high-flying stock; that adds up to $25 million at current share prices.

Amazon is the 800-pound gorilla in the retail space. A decade ago, if you'd asked someone what "Amazon.com" was, they'd reply that it's an online book store. You wouldn't get the same response today, even if books remain an important element of AMZN's business. Amazon's existence is one of the primary factors that so many notable retail names have gone out of business in the last decade, and it's working hard to find new ways to get merchandise to customers more easily and cheaply than before.

To court customers, Amazon has expanded its service offerings to include high margin data hosting and web services, and it's also launched loss leaders like the Kindle, which are designed to spur content consumption. Luckily for shareholders, Mr. Market is willing to listen to the long-term argument in AMZN -- that's the only way to explain the gargantuan valuation premium on shares right now.

But as long as the price momentum remains intact in Amazon, it would be foolish to sell this stock. I'd still recommend keeping tight stops in this stock, even if VCs don't.

To see these stocks in action, check out the Winter 2014 Venture Capital Buys portfolio on Stockpickr.



-- Written by Jonas Elmerraji in Baltimore.

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Follow Stockpickr on Twitter and become a fan on Facebook.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes, Investor's Business Daily and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation. Follow Jonas on Twitter @JonasElmerraji.
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