James, I think that many of the e-commerce stocks are examples of the greater fool theory in action. AMZN is probably the most outrageous example. The problem that I see is that if you short this one you could easily get run over. How long until investors recognize that the emperor has no clothes? In the interim, getting margin calls on this company certainly does not appeal to me.
BKS is much like a jewelry store. It is a highly seasonal business. I think that the addition of Ingram makes it particularly attractive because it can now profit from its competition (AMZN and others use Ingram as their suppliers). What is really odd, and underscores the relative valuation issue, is that BKS has positive cash flow, and is growing at a healthy clip (earnings growth is greater than 25% as I recall), sells roughly 10 times the volume that AMZN does, but has only 10% of the market capitalization of AMZN.
I have yet to see any cash flow projections that justify any market capitalization for AMZN. It looks like a replay of BOST to me.
BTW, looks like one of my growth stocks, ATI, will be bought out by BEL at around a 10% premium over current market prices.
TTFN,
CTC |
