If you are long best to trim down position as part of reallocating for 2014. The more warehouses they build the more they resemble brick and mortar. Are you good at musical chairs. If so hold long. If not you are one of the people that will wonder what happened when the music stops.
When you start examining the price to sales that will be the correct measure to analyze. Trend that line and you will find that this measure is what is the catalyst for the price movement. PE has been meaningless for long time and will continue to be until the first big fund wants out. Then it will be an excuse tor selling.
This would have been a post for two months ago. The money has already been put in. And leverage is pretty high so there are big bets being played into year end for the upside. I think for 2014 will take the other side of that trade.
I agree. We are up close to 50% in one qtr. If there ever was a time it is getting close.. But play with options. Trying to value on PE does not work. It seems to follow a pretty consistent price to sales ratio so as long as sales are going up likely it will trend up. 100B in sales is coming over coming year. So likely 200-225B market cap is possible. Likely though when the lower margins of selling food really hits the already morbid bottom line will get worse. That might signal a top. It just costs to much for delivery and likely people are going to pay the big fees to get into the program.
You will be paying tax on AMZN over the coming year. They volunteered to start collecting in most states by end of this year.
Just did a calculation. A 1K price would put the market cap among the top companies. You would likely be with AAPL and XOM. So you would have a company like XOM that can generate 40B of free cashflow and you would have AMZN with about 4-5B of cashflow. Seems a little unrealistic unless something drastically changed. Like nobody driving their cars or using any gasoline and everybody on earth buying online with amzn.
With such a low short interest now nothing will hold it up if something happens. A few head for the door and this drops $30 just like that. If I were a betting man I would say after this y/e when the cash goes out the door to cover the big a/p built up over the holidays and little earnings that the cashflow will be such that an equity raise or debt issuance will be needed. Or a dramatic cut in cap ex spending. Put spread with expiration in late spring is my bet.
Hard to call this a safety play. Even thought LT debt is manageable they seem to have poor current metrics especially with all the a/p and the relatively small amount of current assets to cover it. If a future credit crisis were to occur this company would not be sitting very well in terms of safety. If you look at the projection of a/p for this q/e they will need some type of credit issuance to cover it all. Especially when they are operating with very little profit. They will need to cut cap spending for sure. Better hope they can keep growing without adding more dist warehouses. Or hope the drones will ship much longer distances with much bigger payloads.
I ate lots of In n Out burgers when living in S Cal. Moved to TX and we finally have them opening up here. One now in Mansfield and Arlington. I did notice after eating away from the restaurant awhile and getting burghers here in TX that the In n out burger patties are pretty small. But overall very tasty and I noticed the parking lots full while the MCD next door was almost empty. In n out is a private company and they don't have to serve shareholders like MCD. So they have more flexibility. But well run they are.
Take an unrealistic growth rate and carry it out into the future at a fed manipulated discount rate and you derive an outrageous present value of earnings.
The door is not a patio door either. It is a small 32" door with fund managers 36" wide. Who is going first. It will be a mad rush once the early selling starts. The ones to focus on are the high flyers that Cramer claims are the anointed ones. CMG is in that group.
What qtrly are you referring to. Did not see anything just viewing it quickly
Exactly. Find the young crowd to be ansy and fleeting and tend to move to the next supposedly great thing. Then we have the quality food hype of CMG. I find it hard to believe that their ingredients are much better than the others. Another feel good story that will crash but you need patience. Probably not shortable either with this liquidity looking for a place to go. But when the timing is right lump this in with the other overpriced sectors of mobile and social.
PBY has been a stinker for a long time. I would think the next worse would be AAP. I do agree this is financial engineering at its finest. The one glaring thing on the balance sheet is their mgmt. of working capital. They are likely pushing out the vendor terms higher and higher as the a/p far exceeds the current assets. I have been watching this for some time and by now would have thought something negative would happen. It keeps getting worse. I do agree that the increasing debt will come back to haunt them but on the other side of the coin based on what they have done already they could pull a rabbit out of their hat and pull something else. Lambert worked for GS. Companies that increase leverage have problems but that is something that won't happen until years later once interest rates go up. Bottom line is they can keep this going longer than most shorts can stay solvent.
Why would you play with fire here. This has been a growing segment and likely will continue at least on par with S&P so you are trying to bet against an upward market and upward segment. Plus this company has been buying back shares. Probably bought back half the float in last decade. Each year more gets bought back. THis will just keep creeping up with the smaller float. I personally have no position but was thinking it was overpriced at 150 and that was long ago.