Amazon and TJX Outshine SpaceX as Growth Stocks
The recent SpaceX IPO has garnered significant attention from investors and media outlets alike. However, its valuation should give investors pause, as it's a money-losing company with a sprawling business that's difficult to analyze.
Two consumer goods sector companies stand out as better investment alternatives: Amazon (AMZN) and TJX Companies (TJX).
Amazon's fast-growing cloud-computing business, Amazon Web Services (AWS), accounts for most of the company's profit. It has a competitive advantage due to its enormous size, making it hard for new entrants to enter the space.
AWS' second-quarter sales grew 36.8% year over year to $42.2 billion, pushing operating income 63.6% higher to $16.6 billion. The company's valuation has become more attractive this year, with a price-to-earnings (P/E) ratio of 22.
TJX Companies is another off-price retailer that buys merchandise from manufacturers at steep discounts and passes savings on to customers. Its business model allows it to thrive during difficult economic times, as wholesalers have more inventory and TJX has more negotiating leverage.