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DHagar
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DHagar,
User Rank: Light Sabre
2/9/2016 | 5:59:04 PM
Re: Oh, those analysts
seven, thanks - good information and analysis!
brooks7
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brooks7,
User Rank: Light Sabre
2/9/2016 | 5:29:07 PM
Re: Oh, those analysts
I would say that based on the current price that Amazon stock is massively overvalued and one would expect only perfect exection to be acceptable.  A quick check showed that the PEG ratio on Amazon stock is 2.6 or so.  A PEG of 1 is a pretty average valuation - one that does not imply much risk in the valuation. 

My point of all of this is that a good company is not necessarily a good investment based on the current valuation of the stock.  That means little to the ongoing growth of the business itself.  Which is the point of separating out the investor view from the overall business prospect.  A relatively good stock price would be say $185/share.

seven

 
DHagar
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DHagar,
User Rank: Light Sabre
2/9/2016 | 2:42:02 PM
Re: Oh, those analysts
Seven, excellent information on the stock value.  So that was my initial question, is this assessment a valid one and a good prediction of falling Amazon value, or is it just playing the bets and the power of Wall Street?  In other words, is the Amazon stock still capable of producing the same level of value?

Note:  Producing cash is not necessarily the same as producing value.
DHagar
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DHagar,
User Rank: Light Sabre
2/9/2016 | 2:35:50 PM
Re: Oh, those analysts
Joe, good analysis.  As long as Amazon can produce in the long-run, they will do well.  They have invested in growth, but if they can deliver, that's all that counts.  Without question they have always had a specific focus and clearly have led the competition.
brooks7
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brooks7,
User Rank: Light Sabre
2/9/2016 | 1:26:44 PM
Re: Oh, those analysts
Forward P/E (1 yr): 56.28

 

That is the reason that the company is not growing in stock price....

seven

 

PS - You need to understand the difference between a good investment and a solid performance from a company.  You buy low - aka when the stock is valued less than the business will be worth.  You sell high - aka when the stock is highly valued.  A supremely high P/E is often a sign that the company's stock is fully price.  That means there is no point in buying it as the stock price won't rise from its current value unless there is a significant growth in Earnings.  So, people sell the stock and thus the law of supply and demand lowers the stock price.

 

 
Joe Stanganelli
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Joe Stanganelli,
User Rank: Light Sabre
2/9/2016 | 1:06:17 PM
Re: Voxsplain
@Mitch: That's the way you do capitalism -- as Looney Tunes taught me many years ago in Yankee Dood It.
Joe Stanganelli
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Joe Stanganelli,
User Rank: Light Sabre
2/9/2016 | 1:03:06 PM
Re: Oh, those analysts
I think Amazon is one of those very few publicly traded companies that are run without giving much of a darn about short-term investors' constant demands for ever-higher quarterly returns ad inifinitum.  Bezos and his board are in it for the long-term; rather than becoming lazy like Yahoo did (allowing Google to take over search -- and almost everything else in the Valley), the company is strategizing like a hungry startup.

For long-term investors, that's good.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
1/31/2016 | 12:10:18 PM
Voxsplain
Amazon explained in one chart. It's spending all its revenue on growing the business, with near-zero profits since its founding more than 20 years ago
DHagar
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DHagar,
User Rank: Light Sabre
1/29/2016 | 5:17:19 PM
Re: Oh, those analysts
@Joe, good point!  Those winners/losers games usually do produce more losers.

Do you agree with the Analysts on Amazon or are they just "feeling their oats"?
Joe Stanganelli
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Joe Stanganelli,
User Rank: Light Sabre
1/29/2016 | 9:10:07 AM
Re: Oh, those analysts
@Mitch: Ehhhh, to be fair, the horse loses too once it loses enough races.
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