Friday, August 9, 2013

Why Amazon Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online retail giant Amazon.com (NASDAQ: AMZN  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Amazon and see what CAPS investors are saying about the stock right now.

Amazon facts

 

 

Headquarters (founded)

Seattle, Wash. (1994)

Market Cap

$122.6 billion

Industry

Internet retail

Trailing-12-Month Revenue

$64.0 billion

Management

Founder/Chairman/CEO Jeff Bezos

CFO Thomas Szkutak

Return on Equity (average, past 3 years)

7.6%

Cash/Debt

$7.9 billion / $3.0 billion

Competitors

Apple

eBay 

Wal-Mart

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 20% of the 6,813 members who have rated Amazon believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, 3Rules, wrote that the Amazon bear case all boiled down to price:

I know, it's always a foolish bet to sell AMZN short. My sentiment isn't against the company or the stock in the long term; I just think it's overdue for a major correction. With a forward (projected) P/E of 80, and trading at over 14 times book value, I believe stock is ripe for some major profit taking. The chart for the last 4 months shows a series of lower highs and lower lows, which does not portend well for the near future.  

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