eBay Grows Up

NEW YORK (TheStreet) -- They grow up so fast. It was only yesterday -- wasn't it? -- that eBay (EBAY) was a cute toddler -- doing all sorts of tricks to make the adults laugh.

Everyone liked to pat it on the head and give it a piece of candy, but a big, serious company with earnings and shares and revenues and growth and all those other grown-up things?

Not hardly.

That was in the late '90s after eBay was founded in 1995. eBay is a teenager now: 17 years old.

My, how it has grown. And like an elderly aunt hugging a reluctant nephew, the market has embraced this once unruly child.

eBay today has a market cap of $68 billion. That's almost twice the size of General Motors ( GM).

Data from Best Stocks Now App

Over the last three years, eBay has returned 30% per year to investors. Compare that with the market return of 8.4%.

Over the last 12 months, eBay has returned 75%, while the market has returned just 13%.

In my Best Stocks Now app, eBay gets a momentum grade of A minus. Sorry about the minus, but remember, we are talking about a large cap stock here.

Data from Best Stocks Now App

While I like performance and momentum, and all that good stuff, I also like value! So what are we paying for this performance at eBay?

Data from Best Stocks Now App

Nineteen times forward earnings. That compares with a market average of about 17, so that is what it is. But how about comparing it with Amazon -- the stock everyone likes to put eBay next to: Amazon is selling at 144 times forward earnings.

Wow. Don't get me wrong. I like Amazon ( AMZN). It is ranked No. 94 out of the 3,212 stocks I follow. I also own it in the Conservative Growth portfolios I manage. But eBay is much cheaper and has a better chart. It is also ranked -- No. 148 and rising fast!

Data from Best Stocks Now App

I am also long eBay in the Conservative Growth accounts that I manage at Gunderson Capital Mgt.

It's like choosing between Peyton and Eli Manning. But in this case, the younger, smaller brother prevails.

Despite some skepticism from the Wall Street Journal and other corners, eBay has been able to grow its earnings this year by double digits.

So far, eBay makes the grade for performance and valuation. But that is only two out of three parts of the stool. Let's look at the third: The chart.

eBay is in a very strong uptrend. The chart went sideways a few months ago and established a nice base. Then a week ago it broke out. (Let's hear it for PayPal! Owned by eBay.)

It's a great chart. So that makes it a trifecta.

I have one rule about stocks I just do not violate: I only buy stocks that have good charts. eBay has a great chart.

Let others guess where Apple ( AAPL) will bottom out. I'll wait and let the chart tell me. I'm in no hurry to lose money.

Put all that together and that is why I like eBay as a conservative, large-cap growth stock. In my opinion-it is a BEST STOCK NOW.

eBay's former CEO, Meg Whitman, is of course now trying to work her magic on HP ( HPQ). I saw some HP shares listed on eBay the other day.

Nobody was buying.

And to think, HP used to be just as cute as eBay.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

More from Opinion

12 Stocks That Our Writers and Their Sources Recommend You Buy Here

12 Stocks That Our Writers and Their Sources Recommend You Buy Here

Musk Goes on Unoriginal Media Tirade

Musk Goes on Unoriginal Media Tirade

What's Happening in Video Games This Week: On the Road to E3

What's Happening in Video Games This Week: On the Road to E3

Wednesday Wrap-Up: Let's Talk About General Electric

Wednesday Wrap-Up: Let's Talk About General Electric

Week of the Women From Finance to Fast Food

Week of the Women From Finance to Fast Food