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The most accurate analyst covering companies like Amazon says these 7 stocks are great bets for the future of e-commerce — even as the coronavirus bump fades

Colin Sebastian Screengrab/YouTube This story is available exclusively on Business Insider Prime. Join BI Prime and start reading now. Colin Sebastian is the most accurate analyst covering consumer discretionary stocks, according to analyst-ranking firm TipRanks. Sebastian covers online shopping, advertising, and video game companies, many of which have seen spectacular gains during the coronavirus pandemic.He told…

Colin SebastianColin Sebastian

Colin Sebastian

Screengrab/YouTube


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By FANG, to FAANG+ and FAANMG, Wall Street’s favorite acronym is becoming a little complicated.

Colin Sebastian, senior research analyst for Robert W. Baird & Co., is supplying a route that’s much easier to keep track of than the expanding FANG group, and what’s more, might give investors more bang for their buck. He calls it”WASP,” and it consists of Wayfair, Amazon, Shopify and PayPal.

Sebastian covers e-commerce, video games, and internet advertising, and TipRanks says he is the most accurate analyst operating in the consumer discretionary sector now . He advised Business Insider concerning the shift in how people are shopping.

“E-commerce talk has approximately doubled in the past couple of months,” he explained. “We’ve seen growth rates really accelerate upon the board for companies like Amazon, eBay, Wayfair, any company that has a meaningful e-commerce enterprise.”

He notes there’s signs that Baby Boomers and older people who never got into the habit of shopping online have made the change as part of an effort to avoid the coronavirus. That’s been a potent addition to the shift that is pre-pandemic. But he says when the pandemic fades from view, it is going to reverse.

“Our assumption is that about half of that incremental market share change is going to be retained,” he said,”What that signifies is that e-commerce penetration in just a matter of 3 months will increase by roughly 50%.”

Sebastian says his select set of four firms should stay ahead through a pullback and well into the future.

“We still like”WASP” basket greater than”FANG,” he wrote in late June.” Wayfair, Amazon, Shopify and PayPal, in our view, provide a persuasive basket of e-commerce vulnerability for investors.”

Read more: The most accurate technician analyst on Wall Street says these 6 stocks possess potential for huge gains since they transform the industry

Sebastian claims that Amazon and Walmart may be just two of the three biggest online shopping platforms of the future. And the third isn’t a rival retailer.

“They supply e-commerce a tech and an e-commerce platform for each of the retailers, all of the businesses that aren’t large enough to build it themselves,” he said. “What they bring to the table is a kind of an enterprise-grade, very scalable, yet quite sophisticated e-commerce platform that’s accessible to retailers of any size”

Shopify inventory is upward 160percent in 2020, and Sebastian raised his price target to $1,100 a share on Monday, implying a gain of about another 10%.

“In this brave new world of e-commerce, we find further upside possibility to quotes as well as share costs, and remain opportunistic buyers,” he said.” eBay continues to increase too, which we have highlighted for more value-oriented investors”

He’s also enthusiastic about two online auto retailers. Sebastian is far from alone in his enthusiasm for used-car seller Carvana, that has rallied almost 50percent this past year.

“They’re one of the smaller companies I pay, but at an emerging category with massive growth potential,” he said. He is also enthusiastic about rival Vroom, which went public last month. He says the US used-car marketplace is worth $800 billion annually, which means there is more than enough space for both businesses.

“While Carvana was effective in legitimizing direct online sales of used cars, Vroom can now capitalize on the recent acceleration in e-commerce in a market still in the first stages of disturbance,” he wrote.

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