dumb money 76

Market Break Out: Intel, Amazon Lead the Way

This is a joke. I can't tell if the author seriously believes that the kindle note that came out the other day is really a justification for the price of AMZN or if he is just pumping it for some other reason.

If you did the research you would see:

1) The analyst that increased his projections on the kindle did not have any access to real numbers. Instead, he based it on a leak to a tech blog. However, what he didn't realize is that the number leaked was the number of kindles shipped to AMZN.

2) Even if his very aggressive projections do hold, he is forcasting another $200 million in REVENUE, not profit, for AMZN over the next 3 years. That news translated into a runup of AMZN on monday that equaled $3 billion in market cap. I think that info is already more than priced in to the price.

3) AMZN has one of the most ridiculous priced stocks aroud:

GOOG
Trailing P/E (ttm, intraday): 33.27
Forward P/E (fye 31-Dec-09) 1: 20.96
PEG Ratio (5 yr expected): 0.85

AAPL
Trailing P/E (ttm, intraday): 35.03
Forward P/E (fye 29-Sep-09) 1: 29.62
PEG Ratio (5 yr expected): 1.39

WMT
Trailing P/E (ttm, intraday): 18.32
Forward P/E (fye 31-Jan-10) 1: 15.22
PEG Ratio (5 yr expected): 1.41

AMZN
Trailing P/E (ttm, intraday): 64.23
Forward P/E (fye 31-Dec-09) 1: 41.46
PEG Ratio (5 yr expected): 2.17

Tell me how AMZN can justify that premium. In reality AMZN's number should be more like
Wall Mart's because it is still a retailer, but even if you give it a tech companies multiples, its still about twice as expensive as it should be.

If you follow this advice and dump all the money you have into AMZN stock, you will be buying into an unsustainable bubble.

Amazon: Recession? What Recession?

This is a joke. I can't tell if the author seriously believes that the kindle note that came out the other day is really a justification for the price of AMZN or if he is just pumping it for some other reason.

If you did the research you would see:

1) The analyst that increased his projections on the kindle did not have any access to real numbers. Instead, he based it on a leak to a tech blog. However, what he didn't realize is that the number leaked was the number of kindles shipped to AMZN.

2) Even if his very aggressive projections do hold, he is forcasting another $200 million in REVENUE, not profit, for AMZN over the next 3 years. That news translated into a runup of AMZN on monday that equaled $3 billion in market cap. I think that info is already more than priced in to the price.

3) AMZN has one of the most ridiculous priced stocks aroud:

GOOG
Trailing P/E (ttm, intraday): 33.27
Forward P/E (fye 31-Dec-09) 1: 20.96
PEG Ratio (5 yr expected): 0.85

AAPL
Trailing P/E (ttm, intraday): 35.03
Forward P/E (fye 29-Sep-09) 1: 29.62
PEG Ratio (5 yr expected): 1.39

WMT
Trailing P/E (ttm, intraday): 18.32
Forward P/E (fye 31-Jan-10) 1: 15.22
PEG Ratio (5 yr expected): 1.41

AMZN
Trailing P/E (ttm, intraday): 64.23
Forward P/E (fye 31-Dec-09) 1: 41.46
PEG Ratio (5 yr expected): 2.17

Tell me how AMZN can justify that premium. In reality AMZN's number should be more like
Wall Mart's because it is still a retailer, but even if you give it a tech companies multiples, its still about twice as expensive as it should be.

If you follow this advice and dump all the money you have into AMZN stock, you will be buying into an unsustainable bubble.

Great Deals at Whole Foods: What about the stock?

I wound up going out closing out at 18.67. Didn't catch the bottom, but it still turned out to be my most profitable position all year. While I don't see a tremendous amount of downside from this point, I also can't bring myself to go long. I just think there are better investments out there, but going long from here may pay off. Its definitely more reasonable now that its been cut down over 75% from its highs a few years ago, but if I'm honest, I still think its probably overvalued, even at these levels. You are going from a short to a long, I went from a long which I closed out in mid 2005 to a short in 2008. Wish they all worked out like this one. Now I'm back on the sidelines. Good luck.

Great Deals at Whole Foods: What about the stock?

Alan,
I like you have been short WFMI since the stock was in the mid 40s. I covered 1/2 my position @ 29 and I still have 1/2 of it left.
Since your arguments (both long and short) were based a lot on PE I don't know why you would by more after hours @a little less than 20. Given WFMI new guidance of .94 earnings a stock price of 20 puts the PE at 21.28, seems significantly higher then their peers, and one that I have a hard time justifying since they just guided their growth rate down from 25-30% to 6-10%.

So if before the report you were hoping for :
"After the report I believe that the PE ratio, though, could rise to 20X as growth begins to pick up again over the next year"

Why would you jump @ a PE over 21, above where you hoped it would go, with the growth rate not rising but getting sliced down to 1/3 of what it was projected be?

I am looking for a bottom to cover the rest of my shares and think I'll find it somewhere below 18. I am interested to know why you think this is a good buy at 20 after that atrocious report which was worse than I or I'm sure you anticipated.

Amazon/Overstock Gamble May Pay Off

I agree with Nima. What the amazon tax does is it closes a tax loophole, which may seem bad if you are enjoying the loophole like the author seems to be, but trying to make it seem that there is an argument is based on the claim that the law will be bad for the businesses in the state is ridiculous. This new law levels the playing field between internet companies that can get away without charging tax and currently are enjoying record profits, and the brick and mortar companies located in the state, that currently have to charge tax, which makes it hard to compete. Also, it is not that you currently have a right to not pay tax, the reality is that even without the new law, new yorkers are still supposed to be paying sales tax when they purchase from these companies. This law is just currently not being enforced. The argument that Overstock stopping it's New York affiliates will hurt businesses in New York, shows that they do actually have a presence in the state and thus should not get special benefits. I would be all for a flat tax or even no tax, but it does not seem right to have a loophole to allow some companies to operate without charging tax is not fair, and stacks the deck against the companies that are located in the state.