B.I.G. Tips – Death by Amazon – 2/9/24

In this note we update performance of our “Death By Amazon” and “Amazon Survivors” indices. The index of stocks that are exposed to Amazon’s business model have traded more or less in lock step with the market over the past two years. That’s a big contrast with the prior decade when they either outperformed or underperformed pretty dramatically.

The same can’t be said for our “Amazon Survivors” names which are intended to capture stocks which are resilient to the rise of Amazon’s monster e-commerce business despite competing with it. This index has generally outperformed the market as a whole.

Both flavors of index have outperformed Amazon significantly over the past five months or so. During that period, the market has broadly rallied even though large tech names like Amazon have sunk to the lowest levels of the equity bear market.

Our “Death By Amazon” index was created many years ago to provide investors with a list of retailers we view as vulnerable to competition from e-commerce.  In 2016, we also created our “Amazon Survivors” index which is made up of companies that look more capable of dealing with the threat from online shopping.  To see how the two indices have been performing lately and view the full list of stocks that make up the indices, please read our newest report on the subject available to Bespoke Premium and Bespoke Institutional members.

To unlock our “Death By Amazon” and “Amazon Survivors” indices, login or start a two-week free trial to either Bespoke Premium or Bespoke Institutional.

B.I.G. Tips – Death by Amazon – 2/10/23

In this note we update performance of our “Death By Amazon” and “Amazon Survivors” indices. The index of stocks that are exposed to Amazon’s business model have traded more or less in lock step with the market over the past two years. That’s a big contrast with the prior decade when they either outperformed or underperformed pretty dramatically.

The same can’t be said for our “Amazon Survivors” names which are intended to capture stocks which are resilient to the rise of Amazon’s monster e-commerce business despite competing with it. This index has generally outperformed the market as a whole.

Both flavors of index have outperformed Amazon significantly over the past five months or so. During that period, the market has broadly rallied even though large tech names like Amazon have sunk to the lowest levels of the equity bear market.

Our “Death By Amazon” index was created many years ago to provide investors with a list of retailers we view as vulnerable to competition from e-commerce.  In 2016, we also created our “Amazon Survivors” index which is made up of companies that look more capable of dealing with the threat from online shopping.  To see how the two indices have been performing lately and view the full list of stocks that make up the indices, please read our newest report on the subject available to Bespoke Premium and Bespoke Institutional members.

To unlock our “Death By Amazon” and “Amazon Survivors” indices, login or start a two-week free trial to either Bespoke Premium or Bespoke Institutional.

B.I.G. Tips – Death by Amazon – 2/25/22

In this note we update performance of our “Death By Amazon” and “Amazon Survivors” indices. The rebound from the COVID shock led to massive outperformance of retail-related stocks like those in our “Death By Amazon” index which made up its entire performance lag versus the broad market since 2012. Since November, that outperformance has trailed off dramatically as “meme” stocks that happen to be in the portfolio trail off and the broad market declines. Since inception, total returns for the DBA are roughly in-line with the overall market.

As for “Amazon Survivors,” since 2016 there’s been significant outperformance that is entirely driven by their performance in the recovery from the COVID drop. Over the past five and a half years, this group of stocks have substantially outperformed the market as a whole. More recently, though, the index has lagged, underperforming the broad market in a manner similar to the “Death By Amazon” index.

Our “Death By Amazon” index was created many years ago to provide investors with a list of retailers we view as vulnerable to competition from e-commerce.  In 2016, we also created our “Amazon Survivors” index which is made up of companies that look more capable of dealing with the threat from online shopping.  To see how the two indices have been performing lately and view the full list of stocks that make up the indices, please read our newest report on the subject available to Bespoke Premium and Bespoke Institutional members.

To unlock our “Death By Amazon” and “Amazon Survivors” indices, login or start a two-week free trial to either Bespoke Premium or Bespoke Institutional.

B.I.G. Tips – Death by Amazon – 10/13/20

Amazon is now up over 1700% since inception of our Death By Amazon indices, while our equally-weighted Death By Amazon index has lagged the S&P 1500 by 70 percentage points over that period. Amazon hasn’t managed to push back above its July 9th relative performance when it rose to 5.83% of the S&P 500’s market cap. Earnings are due in 10 days, with analysts expecting EPS to rise over 70% versus a year ago on revenues 31.7% higher. Contrary to popular perception, Amazon is very profitable. For Q3, analysts forecast a 14.6% EBITDA margin versus 13.8% a year ago, meaning the company earns 17 cents of EBITDA for each dollar of new revenue. Of course, much of that comes from cloud, where competitive pressures are intensifying, but cash flow is cash flow at the end of the day. As for competitors, the fact that we’ve removed another name from our index this month (SMRT due to bankruptcy) is just more evidence of the force of Amazon at work.

Our “Death By Amazon” index was created many years ago to provide investors with a list of retailers we view as vulnerable to competition from e-commerce.  In 2016, we also created our “Amazon Survivors” index which is made up of companies that look more capable of dealing with the threat from online shopping.  To see how the two indices have been performing lately and view the full list of stocks that make up the indices, please read our newest report on the subject available to Bespoke Premium and Bespoke Institutional members.

To unlock our “Death By Amazon” and “Amazon Survivors” indices, login or start a two-week free trial to either Bespoke Premium or Bespoke Institutional.