Pages

Jump to bottom

13 comments

1 JeffFX  Tue, Jan 29, 2013 6:50:21pm

I’m not a stock guy, but if you’re confident it’s currently overvalued because of the jump, you have an opportunity to make some money betting against the stock.

I’d love to see you get rich and never have to worry about income again, because I know what you could accomplish.

2 Jocko's Rocket Ship  Tue, Jan 29, 2013 7:15:03pm

I’m not a follower of Amazon or the industry, so I don’t know the rationale for the valuation. But using a modest EBITDA valuation of 7x 2014 plus their $8b of net cash, it’s not that hard to get to the current valuation.

3 Skip Intro  Tue, Jan 29, 2013 7:20:59pm

Here’s a totally different take on Amazon today.

AMZN: Amazon shares set record high on profit fueled by Kindle e-books, video

The company also said fourth-quarter revenue rose 22 percent to $21.27 billion as it grabbed a big share of online spending during the holidays. But it was the profit that initially caught Wall Street’s eye.

“It was a much better-than-expected gross margin, a strong forward indicator to drive margin expansion. What is really important is gross profit dollars and that line is stronger,” said Ken Sena at Evercore Partners.

The gross profit margins were 24 percent in the fourth quarter, compared with Wall Street expectations of about 22 percent.

“Incredibly strong margins,” said Jordan Rohan, an analyst at Stifel Nicolaus. Amazon generated the highest quarterly gross margin in its North America business in more than three years, he noted.

Amazon mainly operates as a retailer, buying physical products at wholesale prices, storing them and then selling at a slight mark-up to consumers online.

But the company has expanded into other businesses that are potentially more profitable, including cloud computing, digital content and acting as an online marketplace for other merchants.

These newer businesses are growing faster than the company’s original retail operations, boosting profitability.

Link

4 andres  Tue, Jan 29, 2013 8:26:16pm

re: #3 Skip Intro

Here’s a totally different take on Amazon today.

AMZN: Amazon shares set record high on profit fueled by Kindle e-books, video

Link

Part of the issue is that Amazon isn’t clear on its numbers. For example, when Blizzard was adding new costumers to World of Warcraft, they boasted about those numbers on their earnings reports (sure, right now the bury those numbers in as many footnotes as possible, but that’s a story for another day). Apple and other companies do the same. But when Amazon says the Kindle Fire is selling well, they don’t boast with numbers.

It’s worrisome for investors, that’s for sure.

5 Destro  Tue, Jan 29, 2013 10:25:19pm

re: #3 Skip Intro

Amazon saw just $97 million in net profits in Q4. Yes, $97 million. That would be a big win for a company with $1 billion in revenue, but I’m probably not going out on a limb to say that it’s a red flag when you’re doing $21 billion.

Is it because they are undercutting the brick and mortar competition by undercharging for goods?

6 Timmeh  Tue, Jan 29, 2013 10:42:05pm

Were there any one-time charges taken?
Sometimes net profit may be down if the company is reinvesting a lot of money. This article says that although net profit was less than estimates, operating profit was almost double estimates:

Fourth-quarter operating income rose to $405 million, the company said, compared with an average estimate of $212.1 million. Net income fell to $97 million, or 21 cents a share, from $177 million, or 38 cents, a year earlier, Amazon said.

Amazon is the only company “that is able to leverage a global fulfillment network to drive disruption of traditional offline retail sales,” Scott Devitt, an analyst at Morgan Stanley, wrote in a note to clients. “The market is underestimating the long-term international sales opportunity and the cost leverage that will occur as fulfillment investments drive lower unit-variable shipping costs.”
E-Commerce Surge

The spending on fulfillment may help Amazon gain share in a worldwide e-commerce market that Devitt estimated will reach $1 trillion by 2016, up from $512 billion last year. By then, Amazon’s share will be 23.5 percent, pushing the company’s total sales to $166 billion, he projected in a Jan. 6 note.

7 JeffFX  Wed, Jan 30, 2013 5:41:41am

re: #5 Destro

Amazon saw just $97 million in net profits in Q4. Yes, $97 million. That would be a big win for a company with $1 billion in revenue, but I’m probably not going out on a limb to say that it’s a red flag when you’re doing $21 billion.

Is it because they are undercutting the brick and mortar competition by undercharging for goods?

I don’t think so. They wouldn’t operate at a loss, so perhaps you’re just used to being over-charged for goods to pay for showrooms and sales people.

8 Joanne  Wed, Jan 30, 2013 6:02:25am

re: #7 JeffFX

I don’t think so. They wouldn’t operate at a loss, so perhaps you’re just used to being over-charged for goods to pay for showrooms and sales people.

Amazon operated at a loss for years. I remember when they were a fairly new company, the analysts would rail them for not making a profit and continuing growth. They said they had no idea how it stayed in business, and they couldn’t ever wrap their minds around why Jeff Bezos was just such a golden child commanding investor dollars. Yet every year, they broaden what they do, their lines, their partnerships and here we are.

9 Destro  Wed, Jan 30, 2013 6:55:00am

re: #7 JeffFX

I don’t think so. They wouldn’t operate at a loss, so perhaps you’re just used to being over-charged for goods to pay for showrooms and sales people.

I don’t shop in stores anymore if I can help it and have not done so for years (though I may browse and test run a product in one before I buy it online). Why did you assume I did?

Also, it is clear Amazon is not operating at a loss. But they don’t make that much money over their expenses. So I wonder if that is because they don’t jack up the price of the goods they sell?

10 iossarian  Wed, Jan 30, 2013 8:26:35am

Is this another instance of a company making a healthy gross profit, but then magically paying “intellectual property fees” to some subsidiary in a low-tax haven and thus avoiding tax in their notional home country?

Starbucks did this in the UK last year. One phone call to analysts crowing about how much cash they were raking in, and then a tax filing that showed a large intellectual property fee payment to the Caymans, and zero UK profits.

11 Skip Intro  Wed, Jan 30, 2013 9:03:15am

re: #5 Destro

Amazon saw just $97 million in net profits in Q4. Yes, $97 million. That would be a big win for a company with $1 billion in revenue, but I’m probably not going out on a limb to say that it’s a red flag when you’re doing $21 billion.

Is it because they are undercutting the brick and mortar competition by undercharging for goods?

I don’t see who it is they’re undercutting. Much of Amazon’s sales now come from third parties who pay Amazon a percentage of their sales. Their prices aren’t particularly good; the key is you can’t find their items anywhere other than Amazon or other web sites. When I need specialized plumbing items, I can’t buy them at the local jobber any more; they won’t sell to me, but I can buy them through Amazon.

They sell big ticket items, but they sell them at the same price as other internet retailers. Add in that Amazon now collects sales tax in places like California and they’re actually at a disadvantage. Local businesses can compete with Amazon in CA now, if they choose to. Those that don’t are going to have trouble surviving.

12 Destro  Wed, Jan 30, 2013 8:27:14pm

re: #11 Skip Intro

I am not being anti-Amazon - I love their service. I am just wondering why such low profit margins?

13 Destro  Wed, Jan 30, 2013 8:27:52pm

re: #10 iossarian

Is this another instance of a company making a healthy gross profit, but then magically paying “intellectual property fees” to some subsidiary in a low-tax haven and thus avoiding tax in their notional home country?

Starbucks did this in the UK last year. One phone call to analysts crowing about how much cash they were raking in, and then a tax filing that showed a large intellectual property fee payment to the Caymans, and zero UK profits.

Ah! That makes more sense than Amazon having high overhead costs, etc.


This page has been archived.
Comments are closed.

Jump to top

Create a PageThis is the LGF Pages posting bookmarklet. To use it, drag this button to your browser's bookmark bar, and title it 'LGF Pages' (or whatever you like). Then browse to a site you want to post, select some text on the page to use for a quote, click the bookmarklet, and the Pages posting window will appear with the title, text, and any embedded video or audio files already filled in, ready to go.
Or... you can just click this button to open the Pages posting window right away.
Last updated: 2016-01-01 10:29 am PST
LGF User's Guide RSS Feeds

Help support Little Green Footballs!

Subscribe now for ad-free access!Register and sign in to a free LGF account before subscribing, and your ad-free access will be automatically enabled.

Recent PagesClick to refresh
(2015) Assange to Snowden: Don’t Go to Latin America, Go to Russia Despite ‘Bad PR’The Guardian: Julian Assange has said he advised the NSA whistleblower Edward Snowden against seeking asylum in Latin America because he could have been kidnapped and possibly killed there. The WikiLeaks editor-in-chief said he told Snowden to ignore concerns about ...
Eric The Fruit Bat
1 hour, 43 minutes ago
Views: 63 • Comments: 0 • Rating: 0
Tweets: 0 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Sony Is the Only Remaining Hurdle to Cross-Platform Play, Developers Say Back in March, Microsoft announced that it would allow generic cross-platform play on its Xbox Live network. The move was essentially a public challenge for Sony to similarly open up the PlayStation Network, allowing for multiplayer matches involving more ...
Thanos
2 hours, 12 minutes ago
Views: 66 • Comments: 0 • Rating: 0
Tweets: 1 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Cable Lobby Set-Top Offer: No DVR Requirement, No More Compromises The NCTA said customers won't have to pay extra for using third-party apps and boxes but left the door open for other methods of jacking up customers' prices. The cable lobby proposal would require pay-TV companies with at least ...
Thanos
2 hours, 13 minutes ago
Views: 70 • Comments: 0 • Rating: 0
Tweets: 1 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Wildfire Forces Evacuations Near Carmel, Burns More Than 10,000 Acres Big Sur - The Soberanes Fire is burning out of control south of Carmel and Point Lobos, forcing evacuations in Carmel Highlands and the Palo Colorado Canyon area. The wildland fire had consumed more than 10,000 acres by Sunday ...
Thanos
6 hours, 1 minute ago
Views: 91 • Comments: 0 • Rating: 0
Tweets: 1 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Analysis: Russia Stays, and Clean Athletes Scratch Heads If this turns out to be Thomas Bach's defining moment, here's what the leader of the International Olympic Committee will be remembered for: keeping Russia as part of the club, but losing the trust of thousands of athletes who ...
Thanos
6 hours, 3 minutes ago
Views: 88 • Comments: 0 • Rating: 0
Tweets: 1 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Suicide Squad Official Comic-Con Trailer (2016) - Margot Robbie Movie Starring: Will Smith, Margot Robbie, and Jared LetoSuicide Squad Official Comic-Con Trailer (2016) - Margot Robbie Movie A secret government agency recruits imprisoned supervillains to execute dangerous black ops missions in exchange for clemency. Subscribe to TRAILERS: bit.lySubscribe to ...
Thanos
9 hours, 59 minutes ago
Views: 108 • Comments: 0 • Rating: 0
Tweets: 2 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Justice League Official Comic-Con Trailer (2017) - Ben Affleck Movie Starring: Gal Gadot, Jared Leto, Henry CavillJustice League Official Comic-Con Trailer (2017) - Ben Affleck Movie Fueled by his restored faith in humanity and inspired by Superman's selfless act, Bruce Wayne enlists the help of his newfound ally, Diana ...
Thanos
10 hours, 5 minutes ago
Views: 113 • Comments: 0 • Rating: 0
Tweets: 1 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
First Look - Test Flight of Star Trek’s U.S.S. Discovery Revealed at Comic-Con 2016 by Executive Producer Bryan Fuller. Get a sneak peek of the newest ship in the "Star Trek" universe. Star Trek: Discovery premieres January 2017 on the CBS Television Network with the premiere and all subsequent ...
Thanos
10 hours, 10 minutes ago
Views: 130 • Comments: 1 • Rating: 2
Tweets: 1 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
WikiLeaks Just Published Tons of Credit Card and Social Security NumbersSo, this is a thing: The organization has also used that tradition of transparency for less just causes, like today when the site published 19,252 emails from top US Democratic National Committee members, many of which included personal information about ...
jhncsy
12 hours, 4 minutes ago
Views: 127 • Comments: 0 • Rating: 1
Tweets: 0 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Enterprise Pitch for Cisco Ericsson Partnership After seven months of near silence, Cisco and Ericsson executives publicly discussed details on their extensive partnership. Among the tidbits shared by Martin Zander, VP, group strategy programs, Ericsson, and Doug Webster, VP service provider marketing, Cisco: The partnership ...
Thanos
1 day, 1 hour ago
Views: 150 • Comments: 0 • Rating: 0
Tweets: 3 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0