If you could buy just one ecommerce stock, that would be it, and it's not Amazon

None of this is a problem for dynamic investors, who do not care about analysis. For prudent investors, there is an opportunity in one of the largest e-commerce values ​​in the world that has not been accumulated by dynamic investors. They are not Amazons; is Alibaba

Let's explore using a graph.

Graphic

Please click here for a chart of the S&P 500 ETF
SPY,
-1.85%

,
following the S&P 500
SPX
-1.86%,
compared to four other values.

Consider the following:

• The graph compares the S&P 500 to the Dow Jones Industrial Average ETF
DAY
-2.07%,
following the Dow Jones industrial average
DJIA
-2.04%

and Amazon stocks
AMZN
+ 0.14%,
Ali Baba
VASE
-0.63%

and JD.com
JD
+ 1.85%.

• Amazon is dominant in the United States. Alibaba and JD.com are excellent in China. Amazon's revenue for the three months ending in December was $ 87.4 billion. F or Alibaba, it was $ 23.2 billion and for JD.com, it was $ 24.5 billion.

• The graph shows that Amazon stocks have risen by around 27% to date and JD.com stocks have risen by around 24%. In contrast, Alibaba's shares fell about 7%.

• From a fundamental point of view, it's best to look at the price-to-profit-growth ratio (PEG) over five years. It's 0.94 for JD.com, 1.22 for Alibaba and 2.21 for Amazon. Clearly, this means that Amazon is expensive relative to its growth rate. Rather, Alibaba's assessment is reasonable.

• JD.com's value for money (P / E) is 35.84, while Alibaba is 23.81 and Amazon 66.23.

• Amazon gained many admirers during this coronavirus crisis. Before sending me hate mail, be aware that all three stocks are in the Arora report portfolio.

• The chart shows that Alibaba has plunged into the buying area of ​​Arora, offering investors a great opportunity to buy at a lower price.

• Smart money flows are positive on Alibaba. See "In these confusing times, the X-rays of the biggest technology stocks show the strength of the stock market."

• As a precaution, there is a risk linked to China in all of China's actions. It is important that investors correctly assess their positions.

When and how to buy

For those who are eager to buy ecommerce stock, the stock to consider is Alibaba. For those who are patient, it is best to wait for a dip in the shopping area.

Answers to your questions

The answers to some of your questions can be found in my previous writings. Please click here for more details.

Disclosure: subscribers to Arora's report You can have positions on the securities mentioned in this article or you can take positions at any time. Nigam Arora is the founder of The Arora Report, which publishes four newsletters. Nigam can be reached in [email protected].