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  • Amazon: Great River, Bad Investment [View article]
    Collin, good article, I agree with you completely. This morning the talking heads on CNBC were blabbing about Walmart and whether it's valuation has become too "rich". It's a little over 16. These same talking heads don't blink an eye when they talk up Amazon as an investment with a P/E approaching 300. Amazon is so similar to the Internet bubble that it is amazing. No concern for earnings, the only concern is increasing revenues and increasing customers and hopes and promises that some day the profits will come; that some day is always 3 or 4 years out. This last quarter's earnings report and the stock reaction afterwards was a classic example of irrational exuberance. In the preceding 90 days estimates for the quarter were reduced from $.20 to $.02. The company still missed and earned only $.01 and it reduced its estimates for the current quarter significantly and announced that it would probably report a loss. The stock price reaction-up over 7%! Bizarre.
    Aug 15, 2012. 11:14 AM | 5 Likes Like |Link to Comment
  • Amazon: To An All-Time High And Beyond? [View article]
    Marek, you are the voice of reason. For the life of me I do not understand how Amazon can move up 7% with an earnings miss, revenue miss, and yet another in a long string of declines in future earnings and revenue estimates. And this makes 6 quarters in a row of significant earnings declines year over year. ANY other large cap stock with this performance would be hammered mercilessly. Can you dig into this and provide some clarity as to exactly what is happening that the Market seems to have a different set of rules for Amazon. I don't own the stock but I like to do fundamental analysis of various stocks, and this one really has me scratching my head because it doesn't make sense. Amazon has awful fundamentals except for revenue growth and is given a valuation 1000% higher than its competitors! I really don't get it.
    Jul 28, 2012. 10:36 AM | Likes Like |Link to Comment
  • Amazon: To An All-Time High And Beyond? [View article]
    Amazon has plenty of competitors. If Amazon had no competitors it would have a monopoly and would be raking in huge profits by being able to sell products at hefty prices. Amazon isn't a monopoly, and is in a hugely competitive industry competing with large companies like Walmart, Target, Best Buy, Apple, and Samsung and hundreds of smaller companies that sell over the Internet and through brick and mortar stores. This competition forces lower prices than would be found in a monopolistic market. Many of these competing companies actually make handsome profits, something Amazon hasn't figured out yet. Walmart, Target, and Apple also pay dividends to their share holders. Apple made nearly twice as much money this QUARTER than Amazon has made IN ITS HISTORY. I'm not long or short Amazon stock, but everything I see in Amazon stock reminds me of the Internet bubble thirteen years ago. There's a lot of wildly irrational exuberance surrounding this stock. Amazon is a good company but with it's tiny and shrinking net margins it does not have the earnings or earnings potential to warrant a valuation any where near 1000% higher than its competitors.
    Jul 27, 2012. 05:48 PM | 2 Likes Like |Link to Comment
  • Scoop Up After Your Dog Of An Amazon Rumor [View article]
    krk, well done. It's strange that Amazon's earnings get so little scrutiny by most mainstream analysts. The majority of reporting on Amazon's earnings last quarter bragged on the huge earnings beat even though analysis of those earnings determined that over $.21 of the $.28 was hocus pocus. And of course earnings estimates had been reduced significantly during the quarter to just $0.07.
    Jul 23, 2012. 04:31 PM | Likes Like |Link to Comment
  • Amazon Q2 Earnings Preview: Third Party Sale And Margin Expansion In Focus [View article]
    I find it interesting that almost every quarter analysts reduce earnings estimates for Amazon's next quarter to something the company can attain. For the vast majority of companies when analysts reduce earnings estimates the stocks are hammered. But for Amazon it's just business as usual, it's expected. No problem, because while other large caps are expected to grow top line AND bottom line, Amazon only needs to grow its top line. So Amazon's earnings can decline year over year 5 quarters in a row and it's not a big deal. Any other large cap would be slaughtered with that performance. I don't quite understand why the standards are different for Amazon. It's not like the company is a start up, it's been around for about 15 years and its the 23rd largest US company by market cap. This is very strange, does anyone have any insight regarding this matter?
    Jul 22, 2012. 09:15 PM | Likes Like |Link to Comment
  • Amazon Q2 Earnings Preview: Third Party Sale And Margin Expansion In Focus [View article]
    "In Q1, Amazon reported an inline result in which net revenue was $13.2 billion and EPS was $0.78 per share, beating the consensus of $0.39 per share on $12.87 billion in revenue."

    Your numbers are wrong, Amazon Q1 EPS was $0.28 per share. $0.21 of that was from a one time equity gain, $0.07 from operations.
    Jul 20, 2012. 07:14 PM | 1 Like Like |Link to Comment
  • Amazon's Competitive Advantage, Growth Opportunities Make It A Buy [View article]
    Your comparison of Amazon with Wal-Mart over the last 5 years focuses on revenue growth. You conveniently leave out earnings. Wal-Mart has shown consistent earnings growth over the last 5 years despite the presence of Amazon and other on line retailers and Wal-Mart pays a healthy dividend to share holders as well. The reason Wal-Mart hasn't increased revenue as fast as Amazon is first, Wal-Mart is much bigger and second, Wal-Mart is actually concerned about PROFITS, something that Amazon doesn't seem to care about. So Wal-Mart prices its products to make money, and it has done very well in that category. I don't own stock in either company, but if I were to buy one of the two there's no question it would be Wal-Mart.
    Jul 20, 2012. 11:11 AM | 3 Likes Like |Link to Comment
  • 5 Reasons To Buy This Online Retailing Giant [View article]
    benfromchicago2689, they can't tell you because it can't happen. AMZN will never make the kind of money necessary to grow into it's current P/E. Amazon's tiny 1% net margins are shrinking, not growing. Brick and mortar Walmart and Target have higher net margins than Amazon. Why? Because free shipping is more expensive than brick and mortar IMO. The whole Amazon thesis that internet shopping trumps brick and mortar due to lower overhead is false when free shipping is thrown into the equation. So as profits continue to decline year over year the drone will continue from Amazon analysts about how Amazon continues to increase revenue wink wink. Amazon is a current day example of the Internet bubble of the late 90s when internet companies stock prices went up purely on increasing revenue, most were losing money. The difference is those companies were all start ups, Amazon is a large cap that's been around for 15 years, yet it's being treated like start ups were during the bubble. Weird and fishy.
    Jul 20, 2012. 10:58 AM | Likes Like |Link to Comment
  • 5 Reasons To Buy This Online Retailing Giant [View article]
    "The recent strategic move of entering the map and navigation business by acquisition of UpNext will enable users to load maps on the Amazon's Kindle Fire tablet. This native mapping capabilities for Amazon will give a new shape to its tablet segment, and we expect more robust cash flows emanating from Kindle Fire supporting overall financial performance. Going forward, we expect Amazon to capitalize on this acquisition with an eye on the possibility of a smartphone launch."

    Amazon's Kindle Fire tablet is dead in the water, and the second generation Kindle Fire that is released in the next month or two will have a difficult time competing with the Google Nexus 7. If Apple introduces a mini-iPad later in the year that will be even more bad news for the Fire. And it's very likely that if Amazon goes ahead with a smart phone launch it will turn out to be a money pit for them. The vast majority of Android smart phones have very thin margins, this is not a business that Amazon would be wise to enter IMO.
    Jul 19, 2012. 08:05 PM | 1 Like Like |Link to Comment
  • Amazon Shares Up On eBay's Reflected Glory: Good Or Bad? [View article]
    dgress100, well said, you and everyone on Seeking Alpha have a right to express your views in a civil and professional manner. Your comparison of Amazon and Apple is right on. Let me give you a stark example of the difference in profitability of the two companies. Last quarter Apple made a little over $11 billion in profits. That is over double the profits that Amazon has made IN IT'S HISTORY. Yet Amazon sells at a valuation that is about one fifth of Apple. Leads me to believe that Amazon is a bit over valued.
    Jul 19, 2012. 06:01 PM | Likes Like |Link to Comment
  • Why Is Amazon Picked On When The Stock Should Be Picked Up? [View article]
    KenC, I'm in total agreement with you-see my post above. I've been long Apple for several years now. Apple has grown it's top line and bottom line very well for quite a few years in a row now, unlike Amazon. Let me give you a glaring statistic about the difference in profitability of the two companies. Last quarter Apple made a little over $11 billion in profits. That is over double the profits Amazon has made IN ITS HISTORY. Think about that for a while. Amazon is a Wall St. Ponzi scheme that will never make serious money. But then again unlike most other large caps, Amazon doesn't have to make money, it just has to increase its revenue. Right.
    Jul 13, 2012. 10:56 AM | 1 Like Like |Link to Comment
  • Why Is Amazon Picked On When The Stock Should Be Picked Up? [View article]
    macmanud, I agree with your views. Amazon is cut a lot of slack because it is a growth company, but other large cap "growth companies" like Apple are expected to make money and grow the top line as well. Amazon is given a pass regarding making money. Why? Amazon is a large cap company, currently ranking in the top 25 by market cap. No other large cap is given a "bye" on earning money. Amazon seems to be treated like a start up more than a large cap. For a company that's been around as long as Amazon has you would think it would be making serious money by now. In fact, while it's top line revenue is over 500% higher this year than it was in 2004, it's bottom line profit is over 60% lower than it was in 2004.
    Jul 12, 2012. 05:26 PM | 1 Like Like |Link to Comment
  • Why Is Amazon Picked On When The Stock Should Be Picked Up? [View article]
    I find the focus on revenue growth to the exclusion of earnings weird. Any company can increase revenue if it doesn't care about profits. The fact that Amazon's revenue is over 500% higher today than it was in 2004, yet it's profits are over 60% lower today than in 2004 is very telling. Increased revenue does not necessarily translate to increased profits. The company is a large cap, other large caps are expected to grow top line and bottom line, but Amazon is only expected to grow top line. Why? Wal-Mart, Target, Best Buy, and Bed Bath & Beyond have shown lower revenue growth but that's because they actually try to make money every quarter and price their products accordingly. Wal-Mart and Target in particular do a pretty good job of it and pay handsome dividends to boot. I don't buy into the Amazon story.
    Jul 12, 2012. 11:59 AM | 3 Likes Like |Link to Comment
  • Amazon: Next Stop At $225 [View article]
    sfphoto, I like your sarcasm, excellent post. It's true though, the market seems to hold all other large caps to a different standard-they're expected to show sustained earnings growth year over year, while Amazon is only expected to show sustained revenue growth. In fact, Amazon has had declining earnings year over year for 5 quarters running, this quarter will mark the sixth. And what other large cap would not have been hammered if it's earnings expectations for the quarter were reduced 90% as happened this quarter with Amazon? Amazon actually went higher, not lower. Profits don't matter for Amazon, but they sure do matter for everyone else if you're a large cap. Weird. Kind of suspicious looking actually.
    Jul 12, 2012. 09:58 AM | Likes Like |Link to Comment
  • Amazon: Next Stop At $225 [View article]
    Your comparison of Amazon with Walmart and Costco left out some glaring differences. Walmart and Costco make serious profits and have shown consistent earnings growth. In addition both pay a dividend and have P/E ratios that are attractive compared to Amazon's crazy 185. Walmart and Costco also have net margins that are 200-300% higher than Amazon's. Amazon has tiny declining earnings (5 quarters in a row year over year), declining margins, and pays no dividend. And about your recommendation to buy Amazon because you expect it to move up $3 from $222 to $225, what's that all about? That's not exactly a gang buster move that is very compelling. It's less than 1 1/2 %.
    Jul 11, 2012. 02:00 PM | 2 Likes Like |Link to Comment