Can anyone validate this article?
Anyone know about the track record of J.P. Turner & Co.
Small Brokerage Sees Amazon.com's Stock Cut In Half Over Six Months
Dow Jones Online News, Monday, July 27, 1998 at 11:25
NEW YORK -(Dow Jones)- An analyst at a small, year-old securities
firm is injecting a note of caution in the Internet stock frenzy,
predicting that shares of on-line bookseller Amazon.com will lose more
than half of their value in the next six months.
J.P. Turner & Co. analyst Rick Berry said Monday he began coverage of
Amazon.com with an outright "sell" recommendation, citing the lofty
valuation of the bookseller's stock.
Berry said his one-month target price is $95 and his three-month to
six-month target price is $50 to $55. In morning trading, Amazon.com's
stock (AMZN) was down $5.75 at $118.50.
The analyst said Internet stocks are on the verge of a major
correction.
Overall, the Federal Filings Inc. index of Internet stocks is up 168%
this year. Among the highfliers are a half-dozen companies with net
losses, revenue of less than $150 million a year-and market values of at
least $1 billion each.
The stock of Amazon.com, a pioneer in Internet bookselling, has
soared into the stratosphere on the premise that its strong revenue
growth will eventually produce strong profits. Earlier this month, the
company reported a 316% spurt in second-quarter sales to $116 million,
However, its loss amounted to $21.2 million, or 44 cents a share.
Analysts don't expect it to post an annual profit until 2001.
Nevertheless, Amazon.com's market capitalization has climbed to a
startling $6.4 billion, nearly the combined value of rivals Barnes &
Noble Inc. and Borders Group Inc., which together have sales 10 times
Amazon.com's.
Amazon.com's shares are being propelled by an Internet-stock frenzy
that may be the biggest speculative bubble since the biotechnology craze
of the early 1990s. Such speculation often ends badly, and the Internet
boom may be especially vulnerable because of the highly competitive
arena of the Internet has been hostile to profit margins.
Copyright (c) 1998 Dow Jones & Company, Inc.
All Rights Reserved.
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