Amazon? Again? Now? Bird Talk.

amazon-2183855_1920
When Jeff Bezos begin in a Seattle garage few to none would have suspected. Now everyone suspects–suspects they’ll find it on…Amazon. Beginning with online books twenty years ago, Amazon is now online everything. In 2013 the site offered over 200 million items. Wal-mart offers approximately 2 million. That’s part of why they will always be Wal-mart, not Amazon. “Everything for everyone” is the goal. What’d ya think so far? Really think this guy’s done? Protest if you’d like, but…

When

equity markets are pulverized even the best and towering are brutalized, like now. Money “rotates” from once craved growth to plodding defensive sleepers, like now.  Growth lovers love growth and sleepers look gimpy lame.

 

 

However, when airborne macros are ingested into our economic turbines our equity markets are chopped into pigeon bits.  That’s when the “lame” go fame.  Food and utility names are overnight stars, strutting and glittering all over the red carpet.  That’s the carpet that was jerked out from under fabulous growth–like Amazon.  Boeing too.  These world-beaters don’t get their calls returned or invited to the best parties.  Again, like now.

 

Investors behave much like hook-ups. The stars sparkle and then the light flickers down to twenty watts and the sheen is off.  Many “investors” possess the staying power of a stadium wave. “Oops–gotta go.” No kiss. No middle finger. Nothing but asses-and-elbows.

 

Give a stone face and a sentence fragment to that, if you have either.  Recall, that we are indeed living in a relentlessly technical equity hood now.  “Charts please.”  We adapt and now resemble Andy Reid and his multi-color laminate sheet.  You’ll see him later today.

 

Last year AMZN hit 2050.50. Now it’s 1640.56. That’s $410.06 cheaper. Do you think AMZN will ever trade on fundamentals again? If so, now’s you time to begin building a new AMZN fortress–slowly.  Or you can wait and pay more when it’s roaring again.

 

More serious pain is likely in the post.  Nonetheless, better hurry. Those same fair-weather fans are beginning to notice.  If there is no more ugly, you’ll be too late.  If there is, “scale in,” by buying down to fill your position.

    

Fundamentals remain in the backseat now.  Soon said will again seize the profit wheel.  Should you buy Amazon now?  Really?  We think so.  Your answer’s in the charts.  STOCKjAW gets technical.

 

 

Brutal days on the S&P beat.

graphic, chart, $spx, 1-11-19
Playing on a Death cross. Little good is supposed to happen following the ugly cross. Yet there it is–a V-shaped rally just punching through long-term resistance. Iffy MACD and Relative Strength readings provide glimmers of potential glee. Mixed picture, but moving higher presently. Some say “the bottom” is in. Maybe. Nibble, carefully. But avoid momentum players.

 

amzn
Seattle remains the birth place and primary home of the planet’s most potent enterprise. No doubt. Apple’s success was unprecedented. Yet AAPL is a value play now, and AMZN, well isn’t, even at a give-away 3.06 peg.

 

“Ugly Days,” you say?  Keep looking…

chart, amzn, 1-10-19
Current estimates put AMZN at 2% of global e-commerce market share. Amazon is one the largest companies in history now. Scale matters, as does leadership. Does anyone think Bezos is satisfied? What will investors be willing to pay for the Death Star once they realize a 4% market share of global TAM is in sight? More, much more.

 

Here’s how AMZN blew through everything yesterday yo; close, 1-11-19.

chart, amzn, 1-11-19
Friday delivered a gift to owners of Amazon–that’s us yo. You want “price action?” You’ve got bullish price action as buyers bid AMZN straight past long-term resistance and both EMAs, on 8 of 12 days of positive volume. Notice that this action occurred right in the face of the dreaded Death cross.

Perhaps

it was Schwab Senior VP and Chief Investment Strategist, and frequent CNBC guest Liz Ann Sonders who said it.  “Operating income is what I want to see.”  That’s real help.

 

 

As we all seem to accept, AMZN is capable of turning on the earnings tap any time it desires.  Tracking revenue is “fundamental.”  Operating income both refines revenue reads, and excludes any fluctuations created by capital expenditures.

 

 

It’s all relative.  Performance doesn’t rank as such until you check it by the benchmarks.  Here’s AMZN’s, the NASDAQ, symbol $COMPX.

chart, amzn, ov-$compx, 1-11-19
Bargain hunting? Only buy the best, if you’re playing for the long haul. Best of breed does not come any better. When the going gets tough, bigger is truly better. AMZN. Does not display 1-11-19 action.

-THE METRICS WE TRACK MATTER-

Things change.  We want to know how much money our companies make from the business they pursue.  For that read we need to exclude one-time “charges,” or “credits” and CAPEX, along with other fluctuating elements that distort the picture we seek.  This is even more important for growth stocks, like AMZN.  Here’s precisely how that’s done:

First

comes revenue.  Subtract the “cost of goods sold” and you have “gross profit.”  Subtract “operating expenses” and you have “operating income.”

 

REVENUE

SUBTRACT “COST OF GOODS SOLD.”

NOW YOU HAVE “GROSS PROFIT.”

SUBTRACT  “OPERATING EXPENSES.”

EQUALS “OPERATING INCOME.”

AFTER ALL THAT COMES “CAPEX”

AND ONE-TIME “CHARGES” OR COSTS,

OR CREDITS.

AND THAT’S KNOWN AS “EBITDA.”

“EBITDA,” ” EARNINGS BEFORE INTEREST, TAXES,

DEPRECIATION, OR AMORTIZATION.”

FINALLY YOU FACE EARNINGS.

THAT WAS FUN.

Operating income removes the “cost of doing business.”  It’s also referred to as “income from operations.”  It comes before any one-time costs or credits, referred to as “ex-items.”  it also comes before “CAPEX.”

 

Amazon’s CAPEX is massive and uneven, or “lumpy.”  Meanwhile, earnings aren’t even the point for a company busy taking over an entire planet–and they are.  And really, nothing insurmountable stands in their way.

 

Imagine AMZN at 4% of global e-commerce market share.  They’re at 2% now.  You wanna be there then?  We do, and will be.

 

Thanks for Reading.

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STOCKJAW.COM

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https://pixabay.com/en/photos/
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Additional resources:

Investopedia.com.  Seriously Wonderful.  Fact.
http://www.investopedia.com/
Charles Schwab.  In Our Opinion, the best broker going.
https://www.schwab.com/public/schwab/client_home
STOCKJAW.COM EARNESTLY THANKS YOU FOR YOUR INTEREST AND WISHES YOU THE VERY BEST.  THE WORLD BEING WHAT IT IS, WE MUST POST THE FOLLOWING:  ALL CONTENT ON STOCKJAW.COM IS PURELY FOR GENERAL EDUCATIONAL AND ENTERTAINMENT PURPOSES ALONE.  ANY ACTION TAKEN BY ANY READER IS THE SOLE CHOICE AND RESPONSIBILITY OF SAID ACTOR.
Be careful.  Do the work.  Have patience, with yourself.  Never put your dreams away.

 

 

 

STOCKjAW

Dollars Are Employees. We Make Them Work. Slack Dollars Reborn Busy. STOCKjAW helps You make the dollars you worked for work back. Do it simple and streamlined. Or do it Full-Bore. Stocks, ETFs, and more. It's Your cash. Sj helps you point it in the correct direction.

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