Should you follow Jeff Bezos’ lead and sell Amazon stock?
- Jeff Bezos sold $3.3 billion worth of Amazon stock last week.
- The e-commerce giant’s founder has reportedly sold about $8.8 billion of his holding this year.
- AMZN stock offers exciting growth prospects despite its steep valuation.
Amazon.com Inc. (NASDAQ:AMZN) shares on Monday edged lower after reports founder and executive chairman Jeff Bezos sold $3.3 billion worth of AMZN shares last week. According to Bloomberg, Bezos sold $2 billion before selling another $1.3 billion of his Amazon stock holding later in the week.
Other reports also suggest that Bezos has now sold approximately $8.8 billion worth of the stock this year and about $29 billion since the company went public in 1998. This implies that the former Amazon’s CEO has sold more than 27% of his total AMZN stock sales this year.
The stock continues to trade in a choppy pattern formation swinging to a net gain of just over 10% this year, compared to the S&P 500 Index’s equivalent gain of nearly 27%.
Should you bet on AMZN’s growth?Copy link to section
From an investment perspective, Amazon.com shares trade at steep trailing 12-month P/E and forward P/E ratios of 68.81 and 68.20, respectively. Therefore, the stock may be less attractive to value investors.
However, with analysts expecting its earnings per share to grow by nearly 82% this year before rising at an average annual rate of 36% over the next five years, AMZN could be an attractive option for growth investors.
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Technically, Amazon shares seem to be trading within a gently ascending channel formation in the intraday chart. The stock recently bounced off the trendline support to surge towards the trendline resistance.
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However, with shares yet to reach overbought conditions, investors could target extended gains at about $3,634, or higher at $3,763. On the other hand, $3,395 and $3,265 are support levels.
It may not be too late to buy AMZN sharesCopy link to section
In summary, although AMZN shares trade at steep valuation multiples, the stock offers exciting growth prospects, making it an interesting option for long-term investors.
Therefore, with shares rising just over 10% this year and still far from reaching overbought conditions. It may not be too late to bet on the current rebound.