Amazon (AMZN)
Amazon is a great stock for investors with $1000 because of its market dominance and low PEG ratio relative to its historical average. Amazon currently has a PEG ratio of 1.31 which is quite a bit lower than its 10 year historical growth to valuation ratio of around 2.48, which indicates it may be undervalued relative to it’s past self.
They have also beat their last 3 earnings calls and have a history of being able to post strong earnings reports. Amazon is well positioned to take advantage of AI while also benefiting from its diverse and reliable income sources like AWS. The average analyst rating is a Strong Buy with a +13% upside, and we have put AMZN as a Strong Buy with a 20% one year projection.
Microsoft (MSFT)
We think Microsoft is another great stock for investors thanks to it’s cash flows, high earnings growth forecasts, and historically low valuation. At a 26 PE MSFT is easily 10 points lower valued than its historical average, and the fact they continue to beat earnings calls means this low valuation is unjustified.
Analysts are rating it a Strong Buy with an average one year forecast of +32%, and we have put them as low risk, medium reward and have rated it a Strong Buy with a +17% one year forecast.
Walmart (WMT)
Up over 40% in this past year, Walmart stock maintains a strong EPS growth outlook which is reflected in its valuation of a 45 PE. Although it has a small average 10 year yield of 1.6%, WMT’s dividend has remained incredibly reliable over that time and has been growing for 50 years.
They have beat all 4 of their last earnings calls and analysts are holding their Strong Buy rating with an average one year forecast of +6%. However because of its high PEG ratio (around 5 currently) we have put WMT as a low risk, low reward stock and maintain our Hold rating with a +3% upside.
