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  • A Fall iPhone Release May Not Be A Bad Thing For Carriers Or Apple [View article]
    "As investors read warnings that Apple may be hurt if carriers discontinue subsidies, they may want to consider the potential benefits Apple creates for carriers. "

    Carriers who want to do business with Apple and carry the iPhone cannot just unilaterally decide to stop paying subsidies. Apple is in the drivers seat. The iPhone is the most popular smart phone out there and has incredible customer satisfaction and minimal churning compared to other phones. Any carrier that decides to discontinue subsidies would be dumped by Apple in a heart beat. That carrier would then lose most of it's iPhone customers to other carriers. End of story.
    Jun 15, 2012. 05:52 PM | 2 Likes Like |Link to Comment
  • Amazon And LinkedIn Are Safe Ideas For Losing Money [View article]
    You're right. What's even more telling as far as the profitability of Apple compared to Amazon is this little stat. Last QUARTER Apple turned a profit of $11.6 billion. That is over twice the profit that Amazon has earned over the LAST 10 YEARS combined. I used Y Charts for my research.
    Jun 12, 2012. 07:26 PM | Likes Like |Link to Comment
  • Amazon And LinkedIn Are Safe Ideas For Losing Money [View article]
    "Tech companies like Amazon and LinkedIn (LNKD) are holding on to high P/E ratios through the mercy of the market's schizophrenic perspective. On the one hand, the market likes these companies based on their earnings growth histories, which are impressive."

    Your own chart shows that Amazon has not had impressive earnings growth histories, in fact it shows impressive earnings per share declines (-36.6%). This year Amazon's earnings will be less than what they made in 2004. For the year Amazon's earnings will be down from last year by over 10%. How is this impressive earnings growth?
    Jun 12, 2012. 05:47 PM | Likes Like |Link to Comment
  • Why Amazon's Worth North Of $200 Per Share [View article]
    saifl, you hit a bullseye. Earnings for this quarter alone were reduced 90% in the last 90 days from $.20 to $.02. Two years ago earnings estimates for Amazon this year were over $3 a share. It looks like the actual number is going to be about $1.18 or so. Earnings estimates keep dropping every quarter.
    Jun 11, 2012. 06:18 PM | Likes Like |Link to Comment
  •'s Daily Dose Of Reality [View article]
    Paulo, I agree with you completely. The market seems to be valuing Amazon as if it's a tech company and has a high margin when in fact it's a retailer that dabbles in tech and it has very low, and shrinking margins. I did some pencil and paper work over the weekend using Y Charts as a resource. I found that over the last 10 years Amazon's total net profit amount to $5.13 billion. This is less than one half of Apple's profit LAST QUARTER of $11.6 billion. Think about that for a minute. Apple in one quarter earned more than double what Amazon has earned in 10 years, yet Amazon's valuation is over 10 times Apple's. Crazy.
    Jun 11, 2012. 02:47 PM | 2 Likes Like |Link to Comment
  • Why Amazon's Worth North Of $200 Per Share [View article]
    You indicate that Amazon's operating margin has decreased significantly from 2010 to 2012 going from 4.4% to 1.2% as has its net income margin which declined from 3.3% to .9%. With margins declining at this rate it's no wonder that net income has declined significantly despite the huge increase in revenue. Isn't making money (net income) the ultimate bottom line for any company? Amazon is valued like a high margin tech company when it is in fact a low margin retail company that dabbles in tech. A review of net profits taken from Y Charts shows that over the last 10 years Amazon made a total net profit of a little over $5 billion. This is less than one half of the profit Apple made LAST QUARTER alone ($11.6 billion). Yet Amazon's valuation is over 12 times Apple's. Strikes me that Amazon's valuation is a bit rich.
    Jun 11, 2012. 08:24 AM | Likes Like |Link to Comment
  • 5 Reasons Apple Is A Bad Bet [View article]
    musiccomposer, I respectfully disagree. Your rating of 0 is too high.
    Jun 2, 2012. 10:46 AM | 1 Like Like |Link to Comment
  • Why Apple's Book Value Is Irrelevant [View article]
    There's no better proof that using the price to book ratio to make investment decisions is crazy than to compare Apple at a little over 5 with RIMM which is much lower at .35. Using price to book ratio as your decision making criteria RIMM looks like a much better investment. Who in their right mind would rather own RIMM than Apple?
    May 30, 2012. 10:14 AM | 1 Like Like |Link to Comment
  • Report Card: Amazon And Selected Peers [View article]
    Steven, good article, I agree with your general negative/cautious sense regarding investing in Amazon at this time. I would just like to add some clarity to your statement "AMZN continues to surprise Wall Street analysts by beating earnings estimates."

    While this statement is literally true, there's another side to the story. The main reason it is true is that analysts keep reducing Amazon's earnings estimates to numbers they think the company can achieve or beat. They've reduced earnings estimates for Amazon every quarter for the last year plus. This quarter Amazon's earnings estimates were reduced in the last 90 days from $.20 to $.02, that's a 90% reduction. Any other large cap company would have been clobbered with a similar reduction. Last quarter earnings estimates were reduced from over $.20 to $.07. The company reported $.28 for what looked like a huge beat, but $.19 of that was from a one time equity gain, only $.09 was from operations. Even with the reduced estimates, Amazon has in fact missed estimates a couple of quarters in the last year. And it should be noted that Amazon has shown a significant year over year decline in earnings for five quarters in a row, this quarter will mark the sixth.

    "In late April, the price was about $190 and the price spiked to $234 on the news. It is currently selling for $213. I will never understand the American investor and how he or she goes about making investment decisions."

    I agree 100%. I find it difficult to understand why the market believes Amazon deserves such a high valuation when it is in a low margin business that is seeing margin compression, intense competition, and a hostile tax environment.
    May 29, 2012. 05:39 PM | Likes Like |Link to Comment
  • Apple's Fate Could Be Very Similar To Microsoft's [View article]
    Apple sells at a higher P/E than Microsoft. Hmmm, is it possible that the fact that Apple has grown earnings by an average 79% clip over the last 5 years while Microsoft grew at less than 11% over the same time frame a factor in that valuation? (Data is from Yahoo Finance) Do you think a company growing at 7 times the rate of another company deserves a higher valuation? Just wondering.
    May 24, 2012. 08:46 PM | 3 Likes Like |Link to Comment
  • Apple's Fate Could Be Very Similar To Microsoft's [View article]

    Snowden, regarding your question/statement: "Among the hundreds of companies with 300 plus world wide stores, who has the highest sales per sq ft? Who has had the highest sales growth rate, both in total and same store sales."

    Apple is in fact No. 1 regarding sales per square ft., second place belongs to Tiffany's. I don't have definitive data on the growth rates but certainly Apple is in the top 5 and very possibly number 1 in those categories as well.
    May 24, 2012. 08:32 PM | 2 Likes Like |Link to Comment
  • Comparing Amazon And Facebook [View article]
    The EPS estimate for 2013 for Amazon of $2.59 appears to be unrealistic and will likely be reduced significantly. Amazon's earnings estimates have been reduced significantly every quarter for the last six quarters. This quarter's estimates have already dropped 90% in the last 120 days from $.20 to $.02. Last year Amazon was predicted to earn $3.12 this year, the actual number is going to come in around $1.18-maybe, that's over a 60% miss. So while I don't like either FB or Amazon as an investment, it's a little unfair to compare FB projected earnings with Amazon projected earnings that are probably unrealistic and likely to be reduced to much lower levels. Amazon's 5 year estimated EPS growth of 30.2% is also likely inflated and unrealistic.
    May 23, 2012. 11:58 AM | Likes Like |Link to Comment
  • Amazon Under Pressure To Relight The Fire [View article]
    "By all accounts, Amazon had a very good quarter ending in March."

    I guess it depends on how you look at it. Earnings from operations brought in a whopping $.09 a share. A one time equity gain brought in an additional $.19 a share. Total earnings of $.28 constituted a year over year earnings decline of 35%. Not exactly a home run by those measures. Yes, revenue rose 35%, but why is it that revenue is all that counts for Amazon and earnings are ignored or downplayed? It seems that earnings are critical for other large caps but not Amazon. Other large cap companies are expected to invest in growth and still show earnings improvement but Amazon's earnings have declined year over year five quarters in a row. This quarter will make it six quarters in a row. For a large cap stock Amazon seems to be treated more like a start up or small cap.
    May 22, 2012. 01:10 PM | 2 Likes Like |Link to Comment
  • All Aboard The Apple Train? Not So Fast [View article]
    Parsimony, I believe that Apple will not be seeing $500 in our lifetimes unless there's a stock split which is highly unlikely and that Apple will likely break $700 by the time the iPhone 5 is released. Between now and then it will sputter around generally moving higher but won't be going below $530 again. Those waiting for a $450-$515 entry point are likely to miss the boat. I believe a major factor in Apple's decline over the last couple of weeks was money coming out of Apple to prepare to buy and to eventually buy FaceBook. When FaceBook went flat on Friday and again today money came out of FaceBook and moved back into Apple.
    May 21, 2012. 05:22 PM | 3 Likes Like |Link to Comment
  • Triggers Signal To Short - But Do Not Pull The Trigger Yet [View article]
    Agree. On a fundamentals basis the stock is a dog, but to short it is extremely dangerous. The Street loves this stock and seems to care not a wit that it has declining earnings, declining earnings estimates, declining margins yada yada yada. Other stocks would get hammered with similar attributes. Amazon just keeps on ticking. Some day the market will probably get wise to Amazon and value it reasonably but predicting when that day will come is the $64,000 question.
    May 18, 2012. 10:55 AM | Likes Like |Link to Comment