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Timothy Phillips  

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  • Amazon's Revenue Deceleration Probably Continued [View article]
    Paulo - when you do this analysis it is more clear to present Total Merchandise volume (TMV) vs. CA numbers. This is what CA tracks, and so the numbers follow better and are a better predictor. Over the past 4Q's (assuming 11% amazon total fee for 3P like eBay):

    2012 Q2, 2013 Q3, 2013 Q4, 2013 Q1

    CA: 47.6%, 40.4%, 38.5%, 32.2%
    AMZN: 41.6%, 36.0%, 30.3%, TBD

    CA is higher by 6%, 4% and 8% the last 3 Q's. If we expect a 6% avg. delta for Q1, AMZN TMV will be 26.2% - that places overall revenue growth at about 19.6% - well below consensus of 22.6% and company guidance of 20%.
    Apr 9, 2013. 12:59 PM | 2 Likes Like |Link to Comment
  • Amazon's Revenue Deceleration Probably Continued [View article]
    Market reaction to this report was comical/typical as Amazon is currently up more than 1% on bad numbers vs. consensus estimates, and yet eBay, which had a huge jump up (not surprising following the bullish analyst day) is up 4x less than Amazon (up 0.25%). eBay should have been up over 1%, and AMZN down. But the insanity continues as the company that generates awesome profits with improved growth outlook lags the company with no earnings and reduced growth.
    Apr 8, 2013. 03:51 PM | 3 Likes Like |Link to Comment
  • Amazon's AWS And The Public Cloud Paradox [View article]
    IncomeYield, 96% of AMZN is breakeven retail business at best whose growth is slowing immensely and with intense resurgent competitors firing at it on all sides (eBay, WMT, Google, Apple, Target, Best Buy).

    Go ahead and value the 4% AWS+digital business at almost any multiple you want with ridiculous growth prospects and you cannot value the whole of AMZN above $150-$180 (if you understand the dynamics of the on-line retail/consumer headwinds to profit).

    I like the company as well, but the headwinds are too strong in many areas and the stock has gotten way ahead of itself. They have missed on results and guidance for the past 5 Q's, yet the stock is near all time highs ... It is set up for a correction soon.
    Mar 31, 2013. 07:13 AM | 3 Likes Like |Link to Comment
  • "Here's a novel way to drive up a company’s share price," writes the NYT's Jeff Sommer. "Pay billions of dollars in additional taxes." Forensic accountant Robert Olstein reckons that companies such as Apple (AAPL), Microsoft (MSFT) and Cisco (CSCO) should repatriate the tens of billions dollars they hold abroad, pay tax on it, and then use the rest of the cash to repurchase stock. That would boost their share prices by at least 20%. [View news story]
    Why pay tax on it, when you can get a nearly free loan against that foreign cash right here in the USA to either buy back shares, offer increased dividend or invest in the business. When the tax holiday comes (and it will come next administration whether its Clinton or a Republican) you can repatriate and pay off the loan.

    A low repatriation tax may just be the best stimulus the US can have right now, but the current admin's ideology won't allow it.
    Mar 24, 2013. 06:53 AM | 43 Likes Like |Link to Comment
  • Thanks in part to its fulfillment center binge, Amazon's (AMZN +1.6%) shipping ops have become more efficient, argues Deutsche's Ross Sandler. Fewer air shipments, a greater ability to bundle multiple items per order, and last-mile delivery optimization are all helping out. Sandler estimates the use of Amazon Prime for shipping hurts profit contribution per order by 9%, but also notes Prime subs tend to order more. (Kiva Systems[View news story]
    Ross Sandler is flatly wrong, as I have shown in my research (http://seekingalpha.co...).

    AMZN has spent $2.3B on building out Fulfillment centers over the past 2-yrs and over that time their gross shipping expense as a percentage of revenue has increased. The reason their net shipping shipping expense as a percentage of revenue has declined recently is that they have charged more for shipping and increased rates for 3P sellers.
    Mar 23, 2013. 11:23 AM | Likes Like |Link to Comment
  • Timing The Next Move In Coal [View article]
    Paulo do you watch ARLP? 7% dividend that increases every Q and great earnings with good cash flow. I am curious on your opinion vs. other coal stocks.
    Mar 21, 2013. 03:54 PM | 2 Likes Like |Link to Comment
  • Amazon Is Getting Gassed [View article]
    Through 11 weeks:

    Q1 2013: $3.556
    Q4 2012: $3.521 (- 1.0% vs. Q1 2013)
    Q1 2012: $3.582 (+ 0.7% vs. Q1 2013)

    - Y/Y comparison will be favorable for AMZN (my estimate is that 2013 Q1 prices will end up 1.6% lower than 2012 Q1),

    - Q/Q comparison will be a headwind for AMZN (my estimate is that 2013 Q1 prices will be 2.7% higher than 2012 Q4)
    Mar 21, 2013. 02:11 PM | Likes Like |Link to Comment
  • The Bank Of Amazon: How Long Will Suppliers, Sellers And Customers Keep The Doors Open? [View article]
    Americannovice - far from leaving AMZN for dead, it has been pumped continuously in the media and by analysts, so I and others have attempted to provide a counter point ... I have always said Amazon is a very good company and I like to use the service, but it is more than 2x overvalued. I would in fact be a buyer in the neighborhood of $100. But you have to be blinded to be a buyer at $260 based on the facts.
    Mar 20, 2013. 07:06 AM | 1 Like Like |Link to Comment
  • The Bank Of Amazon: How Long Will Suppliers, Sellers And Customers Keep The Doors Open? [View article]
    Thanks Tech, I have been sitting on this for a while until a catalyst came along that would should how clear the issue is. That catalyst was the lawsuit and the escalating complaints that now has led to eBay starting an all out war .. one their balance sheet is far more ready to wage.

    Tim
    Mar 19, 2013. 07:08 PM | Likes Like |Link to Comment
  • The Bank Of Amazon: How Long Will Suppliers, Sellers And Customers Keep The Doors Open? [View article]
    BigJ - it is already starting to happen. EBay is getting very aggressive in lowering costs to increase growth of their marketplace .. they are trying to take advantage of AMZN's recent issues (especially after eBay had similar issues in 2010 it wants far in its rear view mirror).
    Mar 19, 2013. 05:07 PM | Likes Like |Link to Comment
  • Why Do Analysts Use eBay Non-GAAP EPS For Estimates? [View article]
    rw1270 - eBay in this case removes amortization of acquired intangible assets (not depreciation of hard assets). This is from paying more than book value for an acquisition or for IP. They had to pay cash up front, but don;t want to take the earnings hit. The interesting thing is that it continues to grow over time, so they continue to add intangible assets, and they want us to ignore that in the P/E calculation ...
    Mar 19, 2013. 04:57 PM | Likes Like |Link to Comment
  • The Bank Of Amazon: How Long Will Suppliers, Sellers And Customers Keep The Doors Open? [View article]
    I actually don't see that happening, nor does it need to happen for the stock to really tank. They should make a little money this year, but struggle in cash flow based on the numbers in this article.

    As the year goes on CY13 and CY14 estimates will need to be taken down significantly, as it will be obvious that opex will outpace revenue (for all of the reasons Paulo and I have proven), minimizing any improvement in Gross margin. My model shows CY13 needs to be reduced by at least 20% and CY14 by at least 30%. The magnitude of that drop is not as important as the why above because that will reduce the outlook for net margin in the out years, which should crush the multiple (that is where the money is).
    Mar 19, 2013. 03:50 PM | Likes Like |Link to Comment
  • The Bank Of Amazon: How Long Will Suppliers, Sellers And Customers Keep The Doors Open? [View article]
    News just out on eBay - the pressure continues on AMZN 3rd party as a follow to my article:

    eBay (EBAY +1.4%) is eliminating listing fees for most items and simplifying its commission fees, as it tries to sustain Marketplaces' resurgence and slow down Amazon's (AMZN -1.2%) rapid 3rd-party sales growth. Lower-margin items such as electronics will sport lower fee rates than higher-margin items such as clothing. eBay claims the moves, its first fee changes since 2010, will provide more transparency for merchants, who have complained of overly complicated pricing. Yesterday, Reuters reported of discontent among Amazon merchants over rising fees.
    Mar 19, 2013. 01:04 PM | Likes Like |Link to Comment
  • The Bank Of Amazon: How Long Will Suppliers, Sellers And Customers Keep The Doors Open? [View article]
    Max value - I have done about every type of financial analysis and scenario on AMZN (my models from previous articles have nailed gross margin, net margin and revenue growth very closely over time - based on oil prices, product mix trends, monthly retail sales and e-commerce sales) - and my fair value for this stock is in the range of $110 right now. I see no reason why if the chart turns turn bearish, it will not head to that level (or even undershoot it). If it can happen to apple, it can happen to AMZM. The stock has been above $250 for so long we are losing our perspective on how bloated this pig is. If it breaks $220 and holds, it may be a good time to short as the bear will be out of the cage and will run.
    Mar 19, 2013. 11:18 AM | 1 Like Like |Link to Comment
  • The Bank Of Amazon: How Long Will Suppliers, Sellers And Customers Keep The Doors Open? [View article]
    Yes, AMZN has been doing this for years to make up for their operational ineptness. While there sheer size has not paid returns on pricing power as bulls have predicted, it has allowed them to squeeze suppliers. At 76 days accounts payable outstanding, it has reached a tipping point. Even if they keep the days flat now it will have a huge impact on their current ratio (already at 1.1) by the end of the year and put them in a very bad position when they need to go back to the debt market.
    Mar 19, 2013. 10:13 AM | 1 Like Like |Link to Comment
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