After posting a small third-quarter loss on 24% revenue growth, Amazon (AMZN) investors rewarded the company by pushing the stock to a fresh all-time high, while boosting its market value to $165 billion. To put that into context, the size of this behemoth of online retail has today pulled ahead of some serious heavyweights like Oracle (ORCL), Bank of America (BAC) and Citigroup (C), and is closing in on Coca Cola (KO), AT&T (T), and IBM (IBM).
And it's not just market cap. Almost every other traditional means of corporate measurement presents a super stretched set of valuations; including a P/E ratio of 400-times 2013 estimates, 16-times book value, and 2.2-times sales, all of which would normally repel investors.
The reason investors will continue to pay up is simple: CEO Jeff Bezos.
"It sure seems that way," says Ryan Detrick, senior technical strategist at Schaefer's Investment Research in the attached video. "I wouldn't say (Bezos) is bigger than the company, but he's almost equal."
Granted it's hard to calculate the value of having a leader like Bezos atop your company, but since there's no way to take a stake in him directly, the next best thing would be to buy Amazon.
As it stands, three-quarters of analysts of who follow the company currently rate it a buy. And even technical strategists, such as Detrick who can't say anything bad about Amazon's glorious long-term chart, can find even more reasons to justify their love.
"We like to look a little bit beneath the surface, and one thing that we saw that we do like is that short-interest surged 30% over the past month," Detrick points out, noting that a short-term surge in bearish bets often leads to good things "that could potentially continue to push the stock higher."
There was a time several years back, Detrick says, when people used to chastise Bezos for caring more about revenue and the customer experience than profits. But today, this company which turns 20 next year, is still in perpetual investment mode, pouring more and more money back into more and more businesses that have nothing to do with its ubiquitous brown boxes.
Even so, Detrick says the company and the street are expecting a big fourth-quarter and the company "better deliver three months from now."
In the meantime, with the stock gapping higher, he advises would-be investors to wait for a dip or consolidation before jumping in, saying that he would "continue to buy it as long as you see fear and pullbacks."
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