Is it Still Safe to Invest in Amazon (AMZN)?

Miller Value Partners, an investment management firm, published its “Opportunity Equity” first quarter 2022 investor letter – a copy of which can be downloaded here. Amidst the challenges, Miller Opportunity Equity’s net fees declined 3.57% in the quarter, outperforming its benchmark, the S&P 500’s -4.60% return. The Strategy’s long-term performance remains strong. Since inception annualized returns of 7.87% outpaced the S&P 500’s 7.23% by ~64 basis points annually. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Miller Value Partners Opportunity Equity mentioned Amazon.com, Inc. (NASDAQ:AMZN) and explained its insights for the company. Founded in 1994, Amazon.com, Inc. (NASDAQ:AMZN)  is a Seattle, Washington-based e-commerce company with a $1.1 trillion market capitalization. Amazon.com, Inc. (NASDAQ:AMZN) delivered a -32.19% return since the beginning of the year, while its 12-month returns are up by -29.84%. The stock closed at $2,261.10 per share on May 13, 2022.

Here is what Miller Value Partners Opportunity Equity has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter:

“For frame of reference, Amazon (NASDAQ:AMZN) bottomed at the same valuation in the financial crisis (side note: Amazon bottomed at 4x EV/GP after the tech bubble burst)! So there’s historical precedent for the lows being in. We will see whether that holds true this time. Regardless, we think there’s significant upside over a 5-year time horizon. The one other topic I want to briefly address is our volatility. We hope to write something about the topic in more depth in the future, but we want our clients and prospective investors to understand our views on it. We think that volatility is significantly misunderstood. We believe it creates opportunities from which we can profit.”

Photo by Bryan Angelo on Unsplash

Our calculations show that Amazon.com, Inc. (NASDAQ:AMZN) ranks 1st on our list of the 30 Most Popular Stocks Among Hedge Funds. Amazon.com, Inc. (NASDAQ:AMZN) was in 279 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 242 funds in the previous quarter. Amazon.com, Inc. (NASDAQ:AMZN) delivered a -26.25% return in the past 3 months.

In May 2022, we also shared another hedge fund’s views on Amazon.com, Inc. (NASDAQ:AMZN) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.