Should you follow Jeff Bezos’ lead and sell Amazon stock?

on Nov 8, 2021
  • 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.

Follow Invezz on Telegram, Twitter, and Google News for instant updates > 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?

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From an investment perspective, 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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Source – TradingView

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 shares

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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.


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