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Living in the age of Amazon


On July 15 and 16, mighty online retailer Amazon (AMZN) will launch its Prime Day sales extravaganza that will attract millions of consumers looking for bargains.

While the retailer has its detractors, especially among labor advocates critical of its treatment of workers, this is clearly a company on a roll.

It raked in revenue of $59.7 billion in its first fiscal quarter and a cool $3.6 billion in net income.

Cloud Computing

On top of that, its cloud computing services business, Amazon Web Services, continues to grow rapidly. Its market value, which last year surpassed the $1 trillion mark for the first time, is hovering at $961 billion as of July 9.

Short Interest

Another way to show Amazon’s sheer dominance is to look at how investors are treating the giant’s traditional retailing rivals.

Bespoke Investment Group pulled together a list looking at 29 stocks in the S&P 500 Index that are targets of short sellers. It specifically screened for companies that have more than 10% of their share float sold short.

Legacy Plays

At the top of the list is luxury retailer Nordstrom (JWN) that, as Bespoke notes, has 22% of its float sold short.  Other retailers on the list include Under Armour (UAA), Kohl’s (KSS), Macy’s (M), Gap (GPS), and Foot Locker (FL).

In my opinion, this shows that Amazon casts a very long shadow over the retail industry.

This material is from Interactive Advisors Asset Management and is being posted with Interactive Advisor Asset Management’s permission. The views expressed in this material are solely those of the author and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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