Barron's Says Buy E-commerce King, Amazon.com (AMZN)

March 30, 2009 11:26 AM EDT

Barron's historically bearish on Amazon (Nasdaq: AMZN), ostensibly has changed its way, and thinks Amazon.com is now a great company. Barron's said Amazon is winning customers with competitive prices, wide selection, reliability and its electronic reader, Kindle.

Barron's bullish on Amazon.com for the following reasons:

  • No expensive retail real estate.
  • Consumers don't have spend money on gas driving to stores and fighting the mall parking lot.
  • Amazon.com is able to run at a significantly lower cost than that of a traditional retailer (employees, inventory, utilities).
  • While many retailers suffered in '08, Amazon.com's free cash flow rose 16% in '08.
  • Amazon web services, including: databases, computing capacity and data storage.
  • Amazon has already 350,000 Kindle devices.
  • Shares sell at roughly 20 times FCF, which is less than Wal-Mart's (NYSE: WMT) FCF multiple of 22.6 and Costco's (Nasdaq: COST) 25.4.
  • Huge upside with Amazon.com with less than 10% of retail sales done over the Internet.
  • Amazon is also growing overseas. It now ships in six foreign countries, including Germany, Japan and China.
  • Gene Munster says Amazon's high satisfaction ratings is reminiscent of Apple (Nasdaq: AAPL) before the iPod and Netflix (Nasdaq: NFLX) prior to big runs in their stocks.
  • Amazon's Kindle could help increase Amazon's profit margins.
  • Amazon's wide selection and competitive pricing make Amazon "the world's best retailer" says Barron's.
Amazon.com, Inc. (Amazon.com) offers services to consumer customers, seller customers and developer customers.


Related Categories

Analyst Comments
Insiders' Blog

Stocks Mentioned

AAPL 493.42

+0.25 +0.05%
Volume: 22,535,740
Track AAPL

AMZN 185.54

+0.56 +0.30%
Volume: 5,797,310
Track AMZN

COST 84.20

-0.33 -0.39%
Volume: 1,689,036
Track COST

NFLX 123.93

-0.91 -0.73%
Volume: 4,842,934
Track NFLX

WMT 61.90

-0.06 -0.10%
Volume: 5,501,098
Track WMT


Related Entities


Add Your Comment





Follow StreetInsider.com On Twitter