Since the March 23 low, Amazon.com Inc. (AMZN) inventories have increased by 57%, seamlessly outperforming the S.P.500’s gain by approximately 43%. During this period, market capitalization increased from approximately $550 billion to approximately $1.5 trillion. But with the july 30 profits, some investors believe Amazon’s good run is cooling and inventory is falling.
The global pandemic has put Amazon in a favorable position due to the shift from classic e-commerce purchases, with consumers taking refuge in place. This has generated high expectations among investors, as profit estimates have been higher since the end of the first quarter.
Not everyone is optimistic; Recently, a bearish feature industry was made to expire on August 21 with a value of $3100 put and call. Open interest grades increased on July 15 through approximately 2,900 calling contracts and approximately 2,700 contracts to promote functions. The call was sold in the IDB between $196 and $199, the put was purchased at ASK between $262 and $267. It turns out to have created a bearish sales margin, where the industrialer had a total expense of about $70 according to the contract. This means that inventory deserves to remain below $3,030 or less to generate an industry profit.
After reaching a peak of around $3350 on July 14, the inventory fell. Technical trends recommend that inventory is expected to fall further in the coming weeks. Currently, the chart shows a hit and a race, a bearish change pattern. This would recommend that inventory continue its recent decline to around $2,800. If inventory falls below that price, it may drop further, up to $2450.
The relative strength index tended to accumulate and recently this uptrend has broken. This suggests that the bullish impulse is bearish and that Amazon may face additional drops.
As a result of the pandemic, Amazon experienced a significant increase in its business, allowing the company to generate better-than-expected profits in the first quarter and exceed analyst estimates by 2.5%. The strong effects led analysts to reset their forecasts by the time of the quarter. Analysts estimate that the company will have grown 27.5 percent to it a year ago, emerging to $80.8 billion, to the past earnings forecast of about $73 billion on April 13.
However, not everything is pink for Amazon. The company’s prices went up according to the year. Amazon’s first quarter earnings fell by 19.8% of analyst estimates, leading analysts to cut their profit estimates for the current quarter. Currently, profits are expected to have plummeted by $74.3% to $1.34 in line with the percentage of age. This is lower than previous estimates of $6.06 consistent with the% age in mid-April.
But waiting for Amazon’s profits has never been easy, it is known that the company exceeds or loses estimates across wide margins many times over the years. For example, analysts had forecast earnings of $4.03 in the fourth quarter of 2019; instead, the company posted a profit of $6.47, nearly 61% better. Last quarter alone, estimates were $4.62, but the effects were about 8.5% below estimates.
In any case, Amazon has been inconsistent in terms of results reports. This makes betting for or against the company incredibly complicated. This quarter is likely to be no different.
Michael Kramer is a money market strater and portfolio manager for mott Capital’s thematic expansion portfolio.
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Michael Kramer is a money market strater and portfolio manager for mott Capital’s thematic expansion portfolio. His investment philosophy is aimed at
Michael Kramer is a money market strater and portfolio manager for mott Capital’s themed expansion portfolio. Its unique investment philosophy focuses on locating investment opportunities influenced by everyday activities and observing new trends and products that are popular or tend to become popular. In addition, he devotes much of his studies to global macroeconomics and central bank policies that have an effect on money market locations. Michael has more than 20 years of industry experience and began his career in high-risk trading environments, trading U.S. stocks. And foreigners. His business skills, combined with his in-depth monetary studies of public companies, have given him an exclusive attitude towards investment. In addition to basic studies, Michael also incorporates technical studies and market characteristics into his studies.