Tough to go long at $317+ as there will be BOT selling pressure of all of those shares they bought to get back to $310 by the close today to set up for tomorrow's max pain. It's too easy for the MM's ...
HH - that is the issue right now - AMZN is simply based on P/S, and they are falsely juicing sales on the transfer of media revs from 3P to 1P (at 7x the sales). This will continue for several more Q's and AMZN will not cite teh impact. Gives the scam a lot of runway until that comps crush it late next year.
If you follow the trend, P/S of 2.2 on next year's $91B .... = $428 stock price potential.
A group of huge funds hold it long to shrink the true available float (and remove any selling pressure), and then market makers move the stock up on very light volume (becuase there are no sellers), which generates a buy call for retailers through their brokers - as the retail volume moves in, market makers then dump what had bought at low volume into the retail run up. Net effect is large market moves up on light volume/cash-flow.
When this gets tired, the analysts go and give a pump with a target increase (based on the new high price) - this leads to short covering, large stock swing up and more retail movement in (and large trading profits for the analysts trading desks).
Eventually this collases when one of the funds decides to take profits (more profit for the analysts trading desks), and starts a real volume sell off ... retail gets left holding the bag, and fundiez make tons of profit. A bottom is found near fundamental levels (when value buyers step in). For Netflix - this is in the $150 range.
Then people will ask - why and how did it drop so much???
Bubble - here is the actual data (month of 2013 EPS FCT, EPS FCT, stock price on that date, 2013 FWD P/E):
Amazing - when everyone thought that EPS was going to be $5.75 the price was $180. How can anyone think that EPS revisions like this (85% reduction) would lead to a 76% price increase in 2 yrs.
Date / 2013 EPS Forecast / Stock Price / 2013 FWD P/E
Jan 2011 $5.75 $180.00 31
Jan 2012 $3.20 $173.10 54
Jan 2013 $1.76 $250.87 143
Apr 2013 $1.48 $262.00 177
Jun 2013 $1.29 $267.83 208
Sep 2013 $0.87 $317.30 365
These guys are just figuring this out now? Look at any green, cloud, social or mobile stock over the past 3 years and the chart tells all. NFLX is the most glaring example .. goes from 50-300-55-330 all within 2 years! do you think there's hearding? All while nothing changed fundamentally with the company.
Maybe they are finally catching on that is a float scam loaded with collusion. One area I agree with Sybs .. the market has become nothing more than the transfer of wealth from the many to the few.
Fee Cash flow is $389M over the past 12 months, not $5B (they had $5B in operating cash flow less $4.6B in capex .. thus ~ $0.4B in FCF) ... AMZN currently trades at 427x FCF. We don;t need to discuss P/E, just look at multiple of FCF. Highest in S&P500. I thought Jeff was all about Free Cash Flow??? Their not good at generating that either.
CSFB raises price target 33% (from $330 to $439) while lowering Earnings estimates for CY13, CY14 & CY15 by 51%, 47% and 32% respectively. They model CY15 P/E to 78 to set their price (discounted to 100x in today's $)
While they were disappointed that AMZN missed CSOI estimates of $439M by 45% (came in at $267M), they were pumped about revenue and the shipping revenue increase (even though they admitted shipping costs ran well above estimates). They say they like to focus on GM$ (which has to goes up faster than revenue due to AMZN accounting for service revenue at 100% margin, all costs are in opex) - even though Opex $ go up faster than GM$ (hence why CSOI missed estimates).
So higher revs lead to more losses, earnings estimates slashed, and raise the price target 33%!
Every line of the report got more and more insane as they tried to justify a price increase while reducing every metric they track. What a scam.
20% gain so far this year, on top of 44% gain last year. They just got terrible retail sales data, channel advisor AMZN 3P growth is at an all time low (1,600 bps drop in growth from last year), Consumer confidence had a huge drop this morning (and PPI was hot), and it is clear that tapering begins next week .... add to that today another significant AWS outage (2 in 2 weeks now).
What upside can there be at this point with all of those headwinds and they are trading at 106x CY14 earnings estimates? You would think profit taking would have to happen prior to earnings to take some risk off the table.
yes - I have been getting them as well in more regularity lately. Channel advisor data for JUly and Aug has shown the significant weakness in amazon sales. This Q will be a big struggle for them.
let's hope this triggers some sanity profit taking
actually in Jan 2011, analyst estimates for CY13 was $5.75 and the stock traded at $180 (2 YR fwd P/E of 31 .. almost reaosnable).
Now CY13 estimate is $0.87, meaning current P/E is 368 (at $320 stock price). So, Amazon has seen multiple expansion from 31 to 368 for CY13 (12x increase) on much slower growth than expected (they expected 40% growth this year back then).
hapi - what is ridiculous is that sell-side analysts are incentivized to prop up companies with cash flow issues, as they make money when those companies require debt or add-on offerings. It is a double banger for them - they get the trading volume on upgrades, and then the follow on debt/offering commisions. The great companies like AAPL get no love becuase they don't need the markets. This needs to be fixed.
It just keeps going up (stock price up on reductions in EPS)
Losing money to simply grow at the rate of eBay, Goog, Apple, etc is nothing to be proud of when they all make bundles. FB grows 2x AMZN and still makes money. So don;t tell me you need to lose money to grow. BS.
Margin down becuase of this - that is why earnings met as Rev beats
someone has to sell for it to go down - ICahn is not in AMZN. This won;t drop until Capital decides to unload.
Hapi - what I am most amazed about is a $33 move on just over 1% of shares. Very little money flow .. only $1.8B in money flow, yet a $16B move in the stock. This 10-1 return keeps on happening - quite a game ... put in 1% more money, get a 10% return on your entire holdings. No one is selling. Not one major shareholder willing to take profits at this level. This tells me it is going much higher prior to next earnings reports ($425)