We had held off taking a position in Amazon (AMZN, Financial) largely due to concerns about the company's slim margins. But in 2020, we saw its core margins nearly double as more consumers shopped online, which in turn led to greater utilization and route density within Amazon's delivery network. In addition, Amazon's advertising business, which represents a small portion of its overall sales, has been growing quickly. Advertising could become a third leg of growth for the company along with e-commerce and Amazon Web Services. In short, Amazon checks all of our boxes — it has a strong management team, great growth prospects, and a strong competitive advantage. And last year, we initiated our position at an intriguing valuation.
From Mairs and Power (Trades, Portfolio) Growth Fund's fourth-quarter 2020 letter.
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