Amazon trading Heats with unveiling of Kindle Fire Tablet
  • Citigroup Plunges on Lower-than-expected Q4 Results; still Positioned for Growth in 2011
  • Netflix Shares Positioned for Growth amid Rich Valuation
  • " />

    Positioned for Success – Top Online Retail Stock Amazon Continues Growth

    Amazon.com (Nasdaq: AMZN) recovered nearly 76% from the end of June low of $108.61 and traded at 170.39 on November 22, close to the all time high of $173.73. The impressive growth story and the company’s spirit for innovations are responsible for this spectacular growth story. Over the last five years the company’s revenue grew on average by 29% a year, while net earnings per share growth rate stood at 8% a year.

    Amazon is the world’s largest Internet retailer, seeking to be the world’s most customer centric company. Amazon.com was created as a place where people can come to find products online at the lowest possible price. Amazon.com started as an online bookstore in 1994, but soon diversified, selling DVDs, CDs, MP3 downloads, computer software, video games, electronics, apparel, furniture, food and toys.

    The results for Q3 2010 evidenced that Amazon succeeded to outperform the last five years average in terms of revenue and earnings growth. The company’s net sales increased 39% to $7.56 billion Q3 2010, compared with $5.45 billion in Q3 2009.  North America segment sales, representing Amazon’s U.S. and Canadian sites, were $4.13 billion, up 45% from Q3 2009. International segment sales, representing the company’s UK, German, Japanese, French and Chinese sites, were $3.43 billion, up 32% in Q3 2009. Net income increased 16% to $231 million in Q3 2010, or $0.51 per diluted share, compared with net income of $199 million, or $0.45 per diluted share in Q3 2009.

    Moreover, Amazon announced that for Q4 2010, it expects net sales to be in the range of $12.0-$13.3 billion, or to grow between 26% and 40% compared with Q4 2009. The operating income is expected to range between $360 million and $560 million, or between a 24% decline and 18% growth compared with Q4 2009.

    Amazon’s growth was driven by a continuous addition of new product categories, the launching of many new web services and  features, successful introduction of a new generation of Kindle with 3G and Wi-Fi connectivity, the development of the Kindle Store that has more than 720,000 books and the geographical expansion to better service the growing international customer base.

    Amazon began shipping a new Kindle that offers an electronic-ink screen with better contrast, and smaller body, lighter weight, faster page turns, and built-in Wi-Fi at only $139. Kindle 3G adds free 3G wireless for only $189. The new generation Kindle devices are the fastest-selling Kindles of all time and the bestselling products on Amazon.com and Amazon.co.uk. More new generation Kindle devices were ordered in the first twelve weeks of availability than in the same time frame following any other prior Kindle launch.

    Besides the rapidly expanding sales of Kindle, the company innovated a new way to target traditional retailers through the mobile phone. Amazon introduced an application for Apple Inc.’s (Nasdaq: AAPL) iPhone that lets shoppers compare instantly prices of items in stores with the same products from Amazon.  With this application, shoppers can scan the barcodes of products they see in stores or take pictures of them and get an instant price comparison with the option to buy.  According to researcher Aite Group, mobile phone transactions could quadruple to $16 billion in the U.S. this year. Using smartphone technology that can decipher images and read barcodes, Amazon is trying to further gain market share from brick and mortar retailers.

    Amazon’s  Web service CloudFront has officially come out of beta and has now entered general availability. CloudFront allows publishers to use the company’s worldwide content delivery network (CDN) to deliver static and streaming content. Amazon has significantly improved its CDN offering, lowered their pricing at least twice in the past two years and built out a dedicated sales force for CloudFront services. As a result, the company is positioned to compete for a CDN market niche with established players like Akamai (Nasdaq: AKAM), Limelight (Nasdaq: LLNW), Level 3 (Nasdaq: LVLT) and AT&T (Nasdaq: T).

    Another move that could sustain the company’s momentum is the recent launch of amazon.it, an Italian-language Web site offering customers a vast selection of books, DVDs, video games, music and consumer electronics at everyday low prices for Italian online shoppers. Italy is the eighth country where Amazon established a separate Web site.

    Amazon is currently trading at 49.10x times its forward 2011 EPS estimate of $3.47. This represents a huge premium compared to other fast growing IT companies like AAPL or Google (Nasdaq: GOOG) and is indicative of the company’s innovative potential. However current valuation requires from Amazon brilliant strategies and moves to maintain premium trading going forward. Any actions that would threaten the company’s momentum could send the stock sinking.

    • Need fast service and cheap rates from a broker? Click here to see my favorite place to trade AMZN
    • Want more? Check out the message board buzz for AMZN
    • See what newsletters are recommending this stock pick
    • Get breaking news alerts on this stock:  http://thestockmarketwatch.com/

    About Microstockprofit.com

    Microstockprofit.com is committed to producing the highest-quality insight and analysis of small cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily on the underserved OTC stocks market, or penny stock market, which has traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

    Microstockprofit.com Disclaimer

    This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Microstockprofit.com is a wholly owned subsidiary of BlueWave Advisors.

    While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

    Leave a Reply

    Your email address will not be published. Required fields are marked *