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  • Munster's Revenge: Amazon Forward PE Is Now 912 [View article]
    Allan, excellent article. I've long believed the analysts and investment firms that cover Amazon and pump the stock have looked at the company with rose colored glasses and been suspiciously out of touch with certain realities that even amateur analysts have been able to discern. That free cash flow is actually negative is one measure that most Amazon analysts seem to ignore. That gross margin/profits is inflated due to AWS and 3P being counted as 100% gross margin is another. That the $.45 earned last quarter was over 10% less than the earnings of the same quarter last year is another. (Usually declining earnings year over year is not a good thing.) Then there's the consistent declining future earnings estimates quarter after quarter, usually this is not a sign that a company is doing well. Yet, in the face of all of this, analysts and investment firms consistently raise their price targets for Amazon. Peculiar. So now we have a company valued at $180 billion that barely makes a profit one or maybe 2 quarters out of the year. Regarding that forward P/E of 912, my guess is Amazon will lose money for the year. This should result in analysts raising their price targets for Amazon to the 500s.
    Feb 25, 2015. 04:19 PM | 8 Likes Like |Link to Comment
  • Apple tops $132 after Barron's predicts further gains [View news story]
    DGM01, "Why is the company worth 40% more (or $300,000,000,000) more than it was 1 year ago?"

    Because earnings growth and revenue growth is much higher than 1 year ago, and in it's most recent quarter Apple earned over $18 billion-more than any other company has ever made in one quarter. To put that number in perspective, Amazon, which sells for over $370 a share, has made less than $2 billion in its 20 year history. Apple's performance and future prospects warrants its current price/value.
    Feb 23, 2015. 07:20 PM | 5 Likes Like |Link to Comment
  • Apple: Bears Resurrect The Commodity Bogeyman [View article]
    @barantos, you can build the best PC in the world, it still runs Windows and has all the user experience issues that Windows machines have. I was a dedicated Windows PC guy until 2008. I always had top of the line high spec machines. Weekly I had computer crashes, losing my internet connection and having to get into DOS to get it back, and other issues. I finally threw up my hands and decided to give Mac a try and I've never looked back. No more crashes, no more losing my internet connection, my user experience improved 1000%. When you talk about the quality of a PC being better than a Mac I say quality is a lot more than specs, the user experience is paramount.
    Feb 12, 2015. 11:08 AM | 3 Likes Like |Link to Comment
  • Debunking The Latest Myth - Fulfillment Leverage [View article]
    bay320, I gave you one like, I would have given you 100 if I could. This has been an issue with me for years. Amazon is the only company with a market cap over $100 billion that Wall St. would let get away with this degree of incredibly opaque reporting on the company's performance. It's even more amazing that Wall St. allows the company to get away with it. Analysts and investors are forced to play guessing games regarding the number of Kindles sold, the number of Prime members, the profitability of AWS or retail sales etc. And yet analysts and investors seem to be OK with the incredible lack of information. I think Wall St. would scream like hell if Google, WalMart, or Apple would do the same thing, yet Amazon gets a pass just like they get a pass on earnings. What other $160 billion company is allowed to consistently lose money without getting it's stock price hammered?
    Feb 9, 2015. 10:42 AM | 2 Likes Like |Link to Comment
  • Amazon Will Be Showing Losses As Soon As Q1 2012 [View article]
    Paulo, I just reread this article, it's amazing how accurate your predictions have proved to be regarding Amazon's future performance. The vast majority of analysts at the time saw only increasing profits, improving margins, and decreasing P/E ratios in the company's future. You saw the decreasing profits, decreasing margins, and even the losses. Congratulations on having the analytic skills and the courage to publish analyses that are accurate and yet go against the tide. I find it perplexing that Amazon's stock price seems to be completely disconnected from its objective performance. At some point the marriage between the two will occur, and when it happens its not going to be pretty. Keep up the good work.
    Feb 8, 2015. 11:34 AM | Likes Like |Link to Comment
  • Debunking The Latest Myth - Fulfillment Leverage [View article]
    Paulo, and readers, see the article published today by James Brumley in TheStreet titled: "Don't Be Fooled Again by Amazon's Fourth Quarter Earnings". It's right on the money:
    Feb 6, 2015. 10:07 PM | 3 Likes Like |Link to Comment
  • Apple: Bears Resurrect The Commodity Bogeyman [View article]

    @raptorf22, growth doesn't have to come from additional telecom companies. I believe Apple's growth will come from luring customers from the large Android user base. We're already seeing the beginning of it now, but I believe Apple's capture of Android customers is going to explode from here. Solid data from the last quarter indicates that much of the growth in iPhone sales was directly attributed to new customers that previously were Android and Windows phone owners. The fact that there are hundreds of millions of Android users presents a huge growth opportunity for Apple. The only problem Apple might have in future years is scale-can they manufacture enough phones to meet the growing demand.
    Feb 4, 2015. 02:15 PM | 2 Likes Like |Link to Comment
  • Update: Amazon Will Report Amazon Web Services Numbers Next Quarter [View article]
    @surplusmarketing, Henry Blodgett and Kevin Ryan are co-founders of Business Insider. See the links below:
    Feb 3, 2015. 10:27 AM | Likes Like |Link to Comment
  • Update: Amazon Will Report Amazon Web Services Numbers Next Quarter [View article]
    jaymac, Mr. Blodgett is the founder and CEO of Business Insider and Jeff Bezos is an investor in Business Insider.
    Feb 1, 2015. 05:39 PM | 3 Likes Like |Link to Comment
  • Amazon Can Make Money When It Wants [View article]
    Dana, the $.45 per share that Amazon earned during the quarter represents about a 20% DECREASE from the same quarter last year. Normally a significant decrease in year over year earnings is not considered good news. Revenue growth also decelerated and the company missed it's revenue estimate. Amazon also guided to a loss for next quarter and to a further decrease in revenue growth to below 15%. When all of this information is coupled with the worsening free cash flow for the year to the negative $2.2 billion that Amazon reported, I'm puzzled by the positive reaction on Wall St to the report. The data seems to indicate that Amazon's business is not improving, it's deteriorating. Am I missing something?
    Jan 30, 2015. 11:00 AM | 13 Likes Like |Link to Comment
  • Apple: In The Smartphone Race, Samsung Has Already Lost [View article]
    wimkesini, the vast majority of Android phones sold every day are cheap forked versions in China and other third world countries that have processors that are several generations old. They have minimal memory, cannot use Google Play apps, and can barely go on the internet. These are not "smart" phones in the truest sense, they're feature phones. This distorts the true picture when trying to describe Android and IOS share. A more intellectually honest way of doing it would be to break the overall smartphone market into segments-low end, mid tier, and high end. Apple owns the high end, that's where the money is. The low end is worthless, the mid tier is not much better. By including the hundreds of millions of low end feature phones in the overall market the Android smart phone % looks better than it really is.
    Jan 29, 2015. 02:20 PM | 5 Likes Like |Link to Comment
  • Apple: Winning The Profit Battle, Losing The Smartphone War [View article]
    Matthew, Paulo and some others are hung up on "market share" and cannot see the stupidity of it. The "market" for smartphones is segmented, it's not one big ocean, it's several seas. There's the extreme low end dominated by cheap Android forks that are really not "smart" phone, they're feature phones, they can barely go on the internet. There are hundreds of millions of these phones in China and the developing world. Most of these Android forks can't even use the Google play store. Then there's a mid tier and a high end. Apple dominates the higher end with Samsung and a few other Android vendors having share as well. The market share that counts for Apple is the high end. Just like Rolls Royce does not concern itself with overall automobile market share but does care about its share of the luxury part of the market, Apple doesn't care about overall smart phone market share; it cares only about it's share of the high end of the market. Paulo and some others can't grasp this concept and never will, its like talking to a wall.
    Jan 29, 2015. 10:51 AM | 1 Like Like |Link to Comment
  • Cellphones: Apple Steals China Smartphone Crown [View article]
    bjnflicks, you've hit the nail on the head. What makes no sense at all is that Apple's P/E is below the average of the S&P 500. How can that happen, that the most profitable company in the world with over $170 billion in the bank is a "below average" company compared to other companies in the S&P 500? Even Microsoft, that company that just bombed it's earnings last quarter, has a higher P/E than Apple. And then of course there's Amazon, that company that can't make any money, it sells at a huge premium to the S&P 500. I guess this makes sense to Wall St. and I'm just not smart enough to figure it out, but it has the appearance of being crazy weird.
    Jan 28, 2015. 05:59 PM | 9 Likes Like |Link to Comment
  • Apple: Winning The Profit Battle, Losing The Smartphone War [View article]
    Paulo, this year's Xiaomi phones selling in China are quality Android devices and are much cheaper than even the iPhone 5, let alone the 6 and 6S. Yet Apple sold more iPhones than Xiamoi or any other manufacturer in China this past quarter. What does that tell you? The fact that you can get a good Android phone for $100 is not going to impact Apple nearly as much as it will impact Samsung and other high end Android vendors. You get essentially the same Android experience on a Samsung phone as on a Xiaomi phone. But to get the IOS experience you need to buy an iPhone. Customers in China and elsewhere have voted with their wallets, they've chosen the iPhone. You really don't understand this industry.
    Jan 28, 2015. 04:39 PM | 3 Likes Like |Link to Comment
  • Apple: Winning The Profit Battle, Losing The Smartphone War [View article]
    Paulo, you understand Amazon well, you don't have a clue regarding Apple. Androids, good Android phones, have been out for years. Samsung makes them, Xiaomi makes them, Apple is beating the crap out of them competition wise and will continue to do so. You don't understand the attractiveness and stickiness of the Apple/IOS/OSX ecosystem. Android owns the extreme low end of the market and always will, Apple owns the high end where the money is. Stick to your excellent Amazon analysis, don't attempt to analyze smartphones or Apple as it is clear you don't understand the dynamics.
    Jan 28, 2015. 10:20 AM | 39 Likes Like |Link to Comment