A $100 investment in Amazon.com when it debuted on the stock market is worth about $60,000 now. If you missed that particular bandwagon, it’s worth considering the companies that could one day see similar growth.
Wayfair, he writes, is the “Amazon of Home.” The company, which sells furniture and other home goods online, is in the process of making big investments in logistics, technology, and international growth. Devitt thinks that will better insulate Wayfair from competitive pressure from Amazon.com or smaller players. The home goods market could be worth $400 billion in North America and Western Europe, but only a small fraction of that comes from online purchases, giving Wayfair ample room to grow. Devitt thinks the stock will rise 14%, to $78.
He also likes Zalando, dubbing the company “The Amazon of European Fashion.” It recently launched a membership program in Germany that will give shoppers access to perks like same-day shipping, advice from stylists, and early sale access. The company has a high return rate but remains profitable. Zalando is in the midst of signing on new brand partners, and Devitt thinks its shares could rise 12%, to €45.
Finally, he’s a fan of MercadoLibre, “The Amazon of Latin America.” The company operates e-commerce sites and is getting serious about free shipping and loyalty perks for its customers. E-commerce represents a smaller portion of overall retail sales in Latin America than it does in the U.S., meaning there’s strong growth potential. MercadoLibre has impressive market share. Devitt has a $275 price target on the stock, implying 12% upside from current levels.
Big Picture: An analyst upgraded the stocks of three companies he thinks are miniature Amazons.