While the stock market as a whole had a great year, a number of great companies didn’t go along for the ride. That may be due to reasons specific to a company, or simply because some great companies outperformed in 2020 and were simply taking a pause before moving higher.
Investors can still profit from the growth of companies, even large ones, particularly if they’re working to increase profit margins and find new growth opportunities in the coming year.
One such play is Amazon (AMZN). The company is best known for its ecommerce website, which still dominates with nearly 40 percent of the market. Even better is the company’s high-growth and high-margin cloud services division, which is poised for future growth in the coming year.
Yet shares advanced about 3 percent in the past year, far underperforming the stock market in 2021. That could change in 2022 given the company’s positioning and growth trends.
Action to take: Shares are a buy here, even if investors can only pick up one or two shares at a time. The company’s fast growth and increasing cash flows will make it a solid dividend payer in time, although not for a while.
The June $4,500 calls, last going for about $29.25, offer upside in the next few months if shares move higher. It would take a big move for shares to move in-the-money, so traders should look for mid-to-high double-digit profits and take profits quickly.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.