The market, like a hardscrabble farm, rewards patience. Buying when others fear, selling when greed blooms – it’s a simple truth, yet one easily forgotten in the rush. A man doesn’t need a fortune to begin, just a willingness to look beyond the immediate dust and see the potential for growth. To find shares with solid roots, trading at a price that reflects something more than fleeting fancy, that’s the work. And it can pay off, handsomely, for those willing to wait.
Amazon: A River Runs Through It
Amazon. The name itself suggests abundance, a vastness. But even rivers change course, and a careful eye must watch the currents. Much of the company’s strength now flows from Amazon Web Services, the cloud computing arm. In 2025, it accounted for a goodly portion – around 57% – of their operating income. That’s the engine room, quietly powering a great deal of the whole operation.
The numbers tell a story of steady growth. Fourth-quarter sales rose a respectable 23.6% year over year, reaching $35.6 billion, while operating income climbed 17.2% to $12.5 billion. Some fret over the rising expenses, the need for constant reinvestment. Management speaks of $200 billion in capital expenditures this year, a considerable sum. But a farmer doesn’t balk at repairing the barn; he understands it’s the price of future harvests. Amazon, particularly AWS, finds itself in a unique position, a strong current in the rising tide of artificial intelligence.
AWS already holds a leading share – 28% in the fourth quarter – and building the infrastructure for this new world isn’t cheap. Few can afford the cost of these digital fields. Microsoft’s Azure and Alphabet’s Google follow, holding 21% and 14% respectively, but the rest scramble for the remaining scraps. The shares, after a recent dip following earnings, have gained 7% over the last year. Not a fortune, but solid. The S&P 500, in comparison, returned 18.3% – a reminder that quick gains are often built on shaky ground.
This recent price correction has brought the valuation down to earth. The price-to-earnings ratio has eased from 36 to 30, closer to its five-year median of 56. Amazon now trades in line with the S&P 500’s P/E ratio of 29. But a good field deserves a premium, and given the company’s potential, it’s likely to earn it.
Target: Returning to Root Crops
Target, for a time, seemed to lose sight of its strengths. A store is more than just a place to exchange money; it’s a gathering place, a reflection of the community. Target once offered goods you couldn’t easily find elsewhere, a bit of delight in the everyday. Michael Fiddelke, the new CEO, understands this. He aims to bring Target back to its roots, to win back customers who have wandered elsewhere.
His priorities are simple: offer unique merchandise, improve the experience for shoppers both online and in stores, and invest in the tools to make it happen. Competing on price with the likes of Walmart is a fool’s errand. Focusing on what made Target special in the first place – a carefully curated selection, a touch of style – makes sense. He’s made changes in management, planting seeds for this new approach.
Last year saw a slight decline in same-store sales – 2.6% overall, 2.5% in the fourth quarter. But Fiddelke is optimistic. He expects a slight increase in sales this year and a modest expansion of operating margin, from 4.6% to 4.8%. A small harvest, perhaps, but a welcome one.
Target’s shares have rallied somewhat this year, but the gain over the last year remains modest – a mere 5%.
The valuation isn’t as attractive as it once was, but it remains compelling. Target’s P/E ratio is 15, up from 13 a year ago. Still, it’s about half the multiple of the S&P 500, and lower than its five-year median of 17. A solid field, offering a fair return, for those willing to cultivate it.
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2026-03-11 15:13