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Timothy Phillips

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  • Amazon's Reward Could Be Worth The Risks [View article]
    Gary/Paulo - I wrote in this link how Peter Lynch would have approached Amazon:

    http://seekingalpha.co...
    Jul 10 08:07 AM | Likes Like |Link to Comment
  • 1 More Reason To Hate Amazon's Valuation [View article]
    I think 2011 was different as that was AMZN's greatest growth year (> 40%, and added $14B in new revenue) and had profits and significant free cash flow.

    They are growing at half that rate now with no profits and little cash flow.

    An interesting chart is to look not at growth % for AMZN, but the amount of revenue $ they add ... the peak was 2011 at $14B .. they added $13B in 2012, and FCT to add $12B in 2013. So, not only is the % growth shrinking, but the actual amount of revenue added as well. It could be there are capacity/logisitcs issues in adding more than $14B at this point. It is a lot revenue to add each year (i.e. the law of large numbers).
    Jul 10 08:05 AM | Likes Like |Link to Comment
  • Amazon To Take On FedEx And UPS? Or Should It Consider An Acquisition? [View article]
    Look, the whole concept of this is ridiculous for 2 reasons:
    (1) for either FedEx or UPS, AMZN is small piece of the entire business, so it is not really a vertical integration play - they would lose most of the other FedEX/UPS revenue as customers would not ship through their competitor AMZN. The one who would win would be the one who is not bought (either UPS or FEDEx) as they would pick up massive amounts of new business.
    (2) Amazon is out of cash - they can barely fund current operations right now, even with a load of new debt. This would need to be an all stock deal, which would crush AMZN as their FWD P/E is > 100, and FedEX/UPS ~ 15 .. this would crush AMZN P/E and make them actually valued on forward earnings (rather than a dream that was Amazon).
    Jul 10 07:50 AM | Likes Like |Link to Comment
  • 1 More Reason To Hate Amazon's Valuation [View article]
    It has been true over and over, but for most shorts it just doesn't reach the level that are short at unfortunately.

    Even with this incredible run recently, AMZN is trailing the S&P500 and the NSDQ by quite a bit for the CY. That tells me that this is not the "risk-on" trade of last year (other own that privilege now, like TSLA, NFLX, etc..). While I don't think it will drop significantly until the market turns, when the market does turn, this should drop much faster.
    Jul 9 05:23 PM | Likes Like |Link to Comment
  • 1 More Reason To Hate Amazon's Valuation [View article]
    I think the optimism for the stock in the past had been warranted with the huge growth (40%+ every year) and expanding profits (consistently growing through the mid-2000's up to a peak of 3.7% net margin in 2009). Even with those awesome financials back them, the forward P/E was much lower than today.

    2012-2013 is much different and has been driven by QE as the traders have taken advantage big time as I highlight above.
    Jul 9 04:59 PM | Likes Like |Link to Comment
  • Amazon's Reward Could Be Worth The Risks [View article]
    right - you never know! Boy, Gary must be able to retire at this point riding on the back of Capital group.
    Jul 9 01:57 PM | Likes Like |Link to Comment
  • 1 More Reason To Hate Amazon's Valuation [View article]
    PSalerno - I do remember and I also called that once the channel down previous high was broken at $274, this puppy would head up to a new all-time high. This is a typical behavior for the stock a couple of weeks from earnings .. drive up the price to kill freshly minted weak shorts and puts, and take profits at the top pushing it down just prior to earnings and after ... then talking heads tell everyone to buy the dip value, and then rinse and repeat .. very profitable trade pattern.

    From a pure technical standpoint, I agree with you that $291-$292 is most likely that local peak. The recent 5 wave run up just hit it technical peak point at that value (from the $248 bottom), combined with a recent hit on the daily chart RSI that just crossed into overbought territory last night. When those two things occur, this stock usually has an 8-10% drop quickly.
    Jul 9 01:32 PM | Likes Like |Link to Comment
  • Amazon's Reward Could Be Worth The Risks [View article]
    RW, Bezos has said that they sell Kindles at cost in order to gain share (so they can sell digital products). So, just the opposite is true - they have foregone profits for share, and yet they have neither. That is a failure.
    Jul 9 01:24 PM | 2 Likes Like |Link to Comment
  • Amazon's Reward Could Be Worth The Risks [View article]
    Also - how can you brag about 3.7% market share? That is a complete failure after this much time in massively growing market. They can expand market share almost in an unbounded way w/o taking other competitors business in this type of market, and still they cannot.
    Jul 9 09:46 AM | 3 Likes Like |Link to Comment
  • 1 More Reason To Hate Amazon's Valuation [View article]
    Woody - well said.
    Jul 8 06:33 PM | Likes Like |Link to Comment
  • 1 More Reason To Hate Amazon's Valuation [View article]
    PSalerno - agreed. I wrote an article about how bulls value AMZN on 1.8x forward revenue estimate, and why this is a mistake. Here is the link:

    http://seekingalpha.co...
    Jul 4 06:05 PM | Likes Like |Link to Comment
  • 1 More Reason To Hate Amazon's Valuation [View article]
    insiders own about 20% (mostly Bezos), institutions own about 70%, retail 10%.
    Jul 4 06:02 PM | Likes Like |Link to Comment
  • 1 More Reason To Hate Amazon's Valuation [View article]
    Thanks Woody. If you look at all Capital group funds (not just Guardian), they actually own over 11%.
    Jul 3 05:32 PM | Likes Like |Link to Comment
  • 1 More Reason To Hate Amazon's Valuation [View article]
    I have the skeleton done for the eBay vs Amazon article on valuation. Amazon's valuation on almost every metric is 5-9x higher than eBay (you can;t compare P/S as Paulo points out). We're not talking about 50% higher, or even two times .. AMZN is valued an order of magnitude higher !!!
    Jul 3 05:31 PM | 1 Like Like |Link to Comment
  • 1 More Reason To Hate Amazon's Valuation [View article]
    Glenn - I think that is the issue (retail buying options, they even added mini options on the stock recently to increase retail volume) - the option volume is massive on this stock relative to its underlying volume. They are so expensive because the bear case is obvious and thus large demand for puts, straddles, and covered plays. The issue is that the low underlying volume makes it very easy to pin to max pain each week and crush the option holders nearly every time.

    I have studied the trading patterns of this stock in detail and there is a very distinct pattern. While I am short in a core position because I believe that big drop will come at some point, I also sell puts against that position on technical moves and can almost always get the strike/timing right based on the patterns and can collect big on the high premiums.

    During the first 5+ months of the year, Amazon moved to max pain about 85-90% of the time on Friday. 70% of the time that position was a significant movement up (6x normal stock variation) on Friday to crush the larger put position, with the unwinding in the opposite direction on Monday each time. Not surprisingly that opposite move on Mondays was a similar magnitude (about 25% less) and was down, yes you guessed it - ~70% of the time.

    That is mastery by the funds that can afford to blow out long option positions (in either direction, but mostly killing put buyers), as they have identified a stock that generates returns going it.
    Jul 3 05:35 AM | 1 Like Like |Link to Comment
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