Research archive for AMZN

Last week it was announced that Amazon would be leading a $575 million investment in Deliveroo. I have actually been following this company closely for a while now because I met a couple on honeymoon who had gone to Wharton Business School with the founder of Deliveroo. They even got offered the opportunity to invest in it right at the start, which they turned down. Ouch! Having said that they also turned down 6 other startups from their classmates which all failed.

I have now seen it all. Berkshire Hathaway has been buying shares in Amazon. Why do I sound so shocked? Because Amazon is a notoriously expensive stock and Warren is the king of value. He has often mentioned his admiration for Jeff Bezos and Amazon but would often say he was too late.

On Thursday night Amazon released their Q1 earnings. The numbers looked good. Operating cash flow was up 89% to $34.4bn. This is an important number for a company that is notoriously non-profitable because of its' high investment rate. Sales for the quarter increased 17% to $59.7bn, Net income more than doubled to a record $3.6bn or $7.09 a share. Revenues were in line with expectations but profits comfortably beat.

Jeff Bezos released his annual shareholders letter yesterday. It is my third favourite annual letter after Berkshire Hathaway and of course Vestact. He started the letter with an interesting trend.

Companies like Amazon, Google and Facebook need their clients to have access to the internet. Because they have already landed most of the existing connected client base they are desperate to see more people connected. So much so that they are willing to provide internet for free.

The other day I came across this interview with Jim Cramer and the CEO of Amazon Web Services, Andy Jassy. Some of the stats Andy quoted puts the potential of the AWS business into perspective.

Amazon is rumoured to launch new grocery store business in a quest to conquer the world. The company has already clocked online shopping, cloud computing, streaming and has put in a lot of work into advertising and healthcare.

Amazon is said to be seeking a tie-up for its long-suffering Chinese business with online market place Kaola, a company owned by tech giant NetEase. The e-commerce market in China is dominated by Jack Ma's Alibaba and Richard Liu's monolith JD.Com.

When a company reports its results, we immediately look at four key pieces of information. Firstly, its reported profits in Dollars or Rands per share, relative to market expectations. Secondly, sales revenues relative to consensus. These two tell you right away whether we are dealing with a 'beat' or a 'miss'. Thirdly, we look at the tone of the management guidance for the year ahead. Is the outlook good, or are they guiding us lower? Finally, and most importantly of all - what is the share price reaction.

Yesterday, Amazon unveiled Scout, a robot slave with six wheels to feed the appetite of the Amazon customer. Scout has a simple mandate; to deliver your packages to your door but only if you're a Prime Member living in Washington's Snohomish County. Sorry Jozi, not today!

Last week Barry Ritholtz went on a rant about share buy-backs; Bad Buybacks.

Last week Thursday, after the market closed, Amazon released third-quarter numbers. The numbers looked solid but the share price fell back 8%. In it's defence, the share price was up 7% the day before. The market has been very volatile of late making it is difficult to tell what is really moving the share price during this earnings season. Is it the numbers or is it market sentiment?

How can one possibly buy shares in Amazon now, after the stock has done so well? We get this kind of question from time to time, from new clients. The answer is, we expect them to go on doing well, and growing even further.

Lot's of subscribers means lots of potential in this day and age. That is why a company like WhatsApp was valued at $18 billion even though they had not worked out how to monetise the platform.

What a week! So many results, much wow. After yesterday's Facebook drama I was quite apprehensive about Amazon's quarterly update. The Seattle-based online retail giant has had a tremendous run, the share price is up 52% this year. That's right, up by more than half since 1 January 2018. Truly wonderful!