MarketFoolery: 04.27.2011
MarketFoolery
The Motley Fool
4.7 • 1.7K Ratings
🗓️ 27 April 2011
⏱️ 11 minutes
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Summary
Amazon reports a decline in first-quarter profits but shares jump on strong revenue growth and better-than-expected guidance. Is Amazon overvalued? What would an "Amazon tax" on internet commerce mean for the company's bottom line? What's Amazon's biggest opportunity? What's its biggest challenge? Our analysts tackle those questions, delve into some big news from Nokia, and offer up three big questions for Warren Buffett.
Transcript
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| 0:00.0 | It's Wednesday, April 27th, and this is Market Fullery. |
| 0:05.0 | I'm Chris Hill and joining me in studio today from a million dollar portfolio Ron Gross, |
| 0:10.0 | from Hidden Gems Charlie Travers, and from Inside Gems, |
| 0:13.4 | Gems, Charlie Travers, and from Inside Value, |
| 0:13.2 | Joe Maker. |
| 0:13.8 | Guys, good to see you. |
| 0:15.0 | Hello, Chris. |
| 0:16.0 | We've got news from Amazon and Nokia, |
| 0:18.1 | and we will start with Amazon. |
| 0:20.4 | Amazon's first quarter net income fell 33% compared to a year ago as the company is investing |
| 0:26.4 | more money into its online retailing operations and cloud computing businesses. |
| 0:31.6 | But Joe, the company also raised guidance and as a shareholder I'm very happy to say that the stock |
| 0:35.9 | is up today. |
| 0:36.9 | I bet you are. |
| 0:38.2 | Of course it is. |
| 0:39.9 | What is your take? |
| 0:40.9 | What else would the stock? |
| 0:41.9 | Well, yeah, I was going to make that joke. So sales were up 38%. It's like the classic Amazon Pat on the backstory. Sales were up 38%. Profits were down because they're reinvesting in the business and setting themselves up to grow. I think we've been hearing that for a long time, |
| 0:54.7 | but then again the shares were up tenfold from where I sold them several years ago. |
| 0:58.1 | So I'm in no position to mock on that. |
| 1:08.9 | Ron, your thoughts? Well, from a valuation perspective, at 79 times earnings or 42 times cash flow, there better be some significant growth coming down the pike or pike?ike we'll go with both I think both yeah and I think |
| 1:15.6 | there actually will be I mean you know they're not first of all let's remember they are a discount |
... |
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