AMZN – TradingStocks.me

Content

Posts Tagged ‘AMZN’

May

2013

Five reasons to invest in the 360Buy.com IPO

by Alejandro Mendoza

-Posted by Alejandro Guillú Mendoza

We don’t have a 360Buy.com IPO date yet, but when we do, the offering will probably generate a lot of media. Here are five reasons to consider investing in the 360Buy.com IPO:

1) Mr. Liu Qiandong.

Liu Qiandong is currently No. 93 in the list of the Top 400 Richest Chinese with a net worth of over a billion dollars at just 37. He started his own business in 1998 with just $12,000 CNY and six years later he started jd.com. After only 6 years, the company grew to 10 billion yuan in sales. He’s No. 25 on the list of Asia’s Hottest People in Business compiled by Fortune. If somebody from ICBC and the China Construction Bank is reading this, then please LEND THIS MAN TEN BILLION DOLLARS. It is unlikely that you will lose your money with him.

2) Alibaba sells over $170 billion.

I don’t need to explain this one.

3) They want to compete with DHL.

Most people see Jingdong as the next Amazon, but I prefer to see them as the next DHL.

Only 4 companies in the whole world remain in the Air Courier industry: Deutsche Post (Frankfurt: DPW), Federal Express (FDX), United Parcel Service (UPS) and Expeditors International (EXPD).

Together they turn a massive profit of at least $5.1 billion each year. The United States of America dominates this industry with 75% of the companies. At the end of the day, China must pay these companies to move their products from the factories to the stores.

They are very busy building half a dozen distribution centers in China. It is only a matter of time before they expand to the 14 countries that share borders with China.

4) Digital Sky Technologies believes in them.

This Russian company invests only in the Internet, and they had the vision to invest $100 million in Facebook (FB) when the company was valued at just $10 billion in 2009. That same year they also invested in Zynga (ZNGA).

In 2010 they invested $135 million in Groupon (GRPN), when the company was valued at just $1.35 billion. In 2011, they invested in Airbnb, which is now valued at $2 billion.

As you can see, they have a very strong track record of picking the right companies at the right time. If they are investing $1.5 billion in this company, then that means they believe this company will have a market value of $15 billion in 2016.

5) Rakuten is the fourth leading Internet & Catalog Retail Company in the world.

Rakuten of Japan is only behind eBay (EBAY), Liberty Interactive (LINTA, LINTB) and Amazon (AMZN) according to Forbes. This company currently has a market value of over $13 billion and annual sales of $5.6 billion. This company was founded in 1997 and it is now one of the largest companies in the world. They have grown to 10,000 employees. I think they already proven to the world their business model works and 360Buy is doing the same thing in China.

Conclusion

I don’t think this company will file for an IPO anytime soon. If they run out of cash, they can always give a call to Al Waleed Bin Talal and very nicely ask him for another couple of billions.

Tags: 360Buy IPO, 360buy.com, AMZN, EBAY, GRPN, LINTA, LINTB
Posted in Internet stocks, IPOs, private companies, tech stocks | No Comments »

May

2012

Dangdang vs. Renren: Battle of the Chinese tech stocks

by Fred Marion

I recently stumbled upon Sammy Pollack’s post at SeekingAlpha: 3 Reasons Why Renren Is A Better Buy Than Dangdang, and it got me wanting to dig deeper into the two companies to figure out which one I think is a better buy.

Pollack’s firmly entrenched in the Renren camp. Here’s why he’s like the “Chinese Facebook” better than the “Chinese Amazon” (Dangdang):

1) Facebook IPO. The Facebook IPO could drive up interest in Renren as a social networking play behind the Great Firewall.

2) Dangdang churn. The recent resignation of Dangdang’s CFO, Conor Chia-huang Yang, is a sign there could be trouble under the surface at Dangdang.

3) Cash. Renren’s in a stronger financial situation on paper. Indeed, Renren has $284.64 million in cash and equivalents compared to Dangdang’s $30.4 million, and Renren’s actually operating at a profit.

More arguments for Renren

When I first started writing this post, I expected to argue that Dangdang’s the better stock. My research since then has me leaning toward Renren. In addition to the arguments above, here’s why I like Renren over Dangdang:

1) Competition. Dangdang’s got competitors that are aiming squarely for the company’s throat. Among them? The true “Amazon of China”: Amazon.cn. Amazon acquired Joyo.com in 2004 and has been building up it’s presence in the country ever since. Even today, Amazon.cn gets slightly more internet traffic than Dangdang (per Alexa.com).

On top of that, though, both Amazon and Dangdang are overshadowed by 360Buy.com (a Chinese online retail site with backing from Walmart – NYSE:WMT). Renren’s got competition, too (namely in the form of Pengyou.com), but at least it’s neck and neck with Pengyou.com; not a distant competitor struggling to make up ground.

A Twitter-like microblogging site in China, Weibo.cn, could pose the biggest threat to social networks like Renren and Pengyou. Already Weibo gets more traffic, and it’s owned by the deep-pocketed Sina Corporation (NASDAQ:SINA). For now, though, Weibo’s operating more like Twitter and less like Facebook. If that should start to change, Renren should really get nervous.

2) Investors “like” social networks more than retailers. OK. We don’t have official numbers on what sort of market cap the public will give to Facebook, but apparently, Facebook valuations tossed around during the Instagram acquisition went as high as $104 billion (per Dealbook). That’s actually more than Amazon’s current market cap of $102.2 billion.

To sum it up

Let me make it clear that I don’t dislike Dangdang. In fact, I think the stock still has significant upside (and I’d be surprised if it isn’t being looked at by a lot of Western companies, including Amazon, as a potential takeover target).

During its most recent quarter, Dangdang generated $190 million in revenue. That was far more than Renren’s $32 million. Renren has much lower overhead and profit margins, though, so the social network was actually able to claim profitability. Dangdang, on the other hand, operates more like Amazon – forgoing profit in the short-run as it sets itself up for better returns in the future. That makes me like Dangdang in the long-term. In the near-term, though, I expect Renren to outperform Dangdang – particularly in the wake of Facebook’s IPO. Things are just too unsettled in the online retail space in China for investors to dump all of their cash in Dangdang.

UNCOVER THE NEXT MINING GIANT

The Top 500 Gold and Silver Mining Stocks

CIRCLEUP, Y’ALL

A new way to invest in private companies with CircleUp

THINK IN PICTURES

When is Pinterest’s IPO date?

A JOLT TO THE SYSTEM

Why Citi says investors should stay away from silver

BLAZING A DIFFERENT PATH

3 reasons to invest in a Kickstarter IPO

ESCAPE THE CUBICLE, BEFORE YOU’VE GOTTEN THERE

How to earn $100,000 at age 15

Tags: AMZN, chinese tech stocks, DANG, RENN, SINA, WMT
Posted in Chinese stocks, Internet stocks, tech stocks | No Comments »

Apr

2012

How high can Amazon’s stock go?

by Fred Marion

After reporting earnings on Thursday evening, Amazon.com’s (NASDAQ:AMZN) shares shot up $30 each – a gain of 15 percent that nearly added $14 billion (yes “billion”) to the company’s market cap in a single day of trading.

“The March quarterly results showed just enough upside in both revenues and margins to make the naysayers run for cover,” Stifel Nicolaus analyst Jordan Rohan wrote in a research note (per Businessweek).

All told, Amazon earned $130 million or $0.28 per share in the quarter ended March 31. The bad news? That was down 35 percent over the same quarter in 2011. The good news? Analysts were expecting the company to earn just $0.07 per share.

A big drop in earnings would typically send investors packing, but Amazon’s different. The company’s famously willing to forgo big earnings in exchange for investments that should pan out at some vague time in the future. The Kindle Fire is a great example. Amazon’s actually selling the device below cost out of the hopes that it will earn back that loss in digital media sales. All this has Amazon trading at a rather preposterous P/E ratio of 186.

Knowing that, is Amazon a buy at these high numbers? If so, how high can Amazon’s shares go?

Future growth for Amazon

I see several key areas for future growth at Amazon. The biggest are:

1) A mushrooming digital empire. In a statement from CEO Jeffrey Bezos, Amazon was eager to point out the thousands of ebooks that can only be purchased on the Kindle. “You won’t find them anywhere else,” Bezos wrote. “They include many of our top bestsellers—in fact 16 of our top 100 bestselling titles are exclusive to our store.”

Amazon’s in an all-out war with Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) and Barnes & Noble (NYSE:BKS) to lead the e-reader (and tablet) market. Taking a cut of digital downloads, after all, is what’s helped Apple generate earnings surprises for years.

Amazon’s trying to duplicate that performance with its App Marketplace and Kindle Fire book, music and video downloads. The company’s on the right track, too, with revenue from Amazon’s “media business” in North America growing 17 percent to $2.2 billion during the most recent quarter.

“One of the big reasons for that growth is because of our digital offerings,” Tom Szkutak, Amazon’s chief financial officer, said in a conference call (per the Post Gazette). “Kindle and the total digital business is growing very strong.”

Even compared with physical goods, digital goods sales are booming. Amazon claims that nine out of its top 10 best-selling products are digital goods, including Kindles, Kindle books, movies, music and apps.

We don’t know the actual number of Kindles that were sold, but Amazon did say sales for the various models of the device were up 43 percent over the same quarter in 2011.

2) The birth of an Amazon phone. We don’t have proof yet, but late last year, Citigroup analysts argued Amazon was working on developing a smartphone that should be ready to launch in time for Christmas in 2012. “Channel checks suggest the Amazon smartphone will have a 4-inch touch panel display, an 8 mega pixel camera, and adopt a Microsoft operating system,” Forbes wrote at the time.

I’d be surprised if the device ran a Microsoft OS, but I definitely wouldn’t be surprised to see some sort of smartphone for sale on the retailer’s Web site this fall. The launch of a competitive smartphone (somewhere between $140-$200) could give Amazon an increasingly-large piece of Apple’s digital pie.

3) Groceries anyone? Amazon’s re-defining the way we shop for everyday things. A number of my friends use Amazon for everything they possibly can – from deodorant to underwear and diapers. To extend this model further, Amazon could expand the grocery delivery program it has in place in Seattle.

Seattle customers can log onto Amazon Fresh and buy everything from probiotics to fresh fish from Pike Place. Shopping for everyday items like milk is almost overwhelming. Do a search for it on Amazon Fresh, and you’ll get more than 150 different results.

Speculation’s been around for more than four years that Amazon would try to roll out it’s grocery delivery service nationwide. If it happens, expect it to radically alter communities where the service is available. And expect it to add to Amazon’s bottom line.

Amazon stock price target

Analysts have a mean price target of $218.69 on Amazon’s stock (per the Orlando Sentinel). Of course, that price target isn’t tied to a date, and I feel like Amazon has a lot higher to climb.

Why? Amazon set on becoming the world’s largest retailer. Period. According to RetailNet Group, Amazon will be the world’s No. 3 retailer by 2016 (they’re currently ranked No. 21). That’ll put it ahead of all the big retailers except for two: Carrefour and Walmart (NYSE:WMT). Could Amazon ever take on Walmart? Yes, but it’s not going to be anytime soon. Walmart’s sales are forecast to hit $444 billion this year, and Amazon’s expected to hit $48 billion.

Growth will be rapid at Amazon.com, though. Sales should hit $140 billion a year by 2016. That’s triple today’s numbers. If that holds true expect Amazon stock price forecasts of $218.69 look incredibly short-sighted.

UNCOVER THE NEXT MINING GIANT

The Top 500 Gold and Silver Mining Stocks

CIRCLEUP, Y’ALL

A new way to invest in private companies with CircleUp

THINK IN PICTURES

When is Pinterest’s IPO date?

A JOLT TO THE SYSTEM

Why Citi says investors should stay away from silver

BLAZING A DIFFERENT PATH

3 reasons to invest in a Kickstarter IPO

ESCAPE THE CUBICLE, BEFORE YOU’VE GOTTEN THERE

How to earn $100,000 at age 15

Tags: AMZN, APPL, GOOG, WMT
Posted in Internet stocks, tech stocks | No Comments »

Jan

2012

Why are E-Commerce China Dangdang’s shares on fire?

by Fred Mason

There’s one stock in particular that drubbed my portfolio last year, and it happens to be E-Commerce China DangDang (NYSE:DANG). Fanfare was high when DangDang made its initial public offering in December 2010. That early love affair with “China’s Amazon” wore off quickly, though, and investors dumped shares like crewmen bailing water in a leaky boat.

DangDang shed more than 80 percent of it’s value in 2011 as shares free-fell from $30 to $4 a pop. I cringed every time I checked my 401K. But something magical seems to be happening for shares in 2012. Over the past month, DangDang has shot up 98 percent. What gives?

Here’s my assessment of why DangDang shares are recovering:

1) More users, more cashflow. DangDang used money from its IPO to expand its offerings and bolster the company’s distribution system. That’s helped drive up the number of orders at the site by 32 percent over the past year (per Fool.com). The site’s also driven up its total number of users to 5.5 million, up 36% over last year.

2) Renewed interest in Chinese stocks. With the Federal Reserve’s recent announcement that it plans to keep interest rates near zero until at least 2014, investors’ risk appetite has grown quickly. That’s pushed up a lot of Chinese stocks – and DangDang’s going along for the ride. Other winners include social networking company Renren Inc. (NYSE:RENN), up 60 percent since the start of the year, and video-streaming company Youku Inc. (Public, NYSE:YOKU), up 45 percent.

3) Robust EPS growth. According to CNAnalyst, DangDang’s long-term annual EPS growth should hit 53.3 percent. That puts it ahead of just about every top small-cap stock on the market besides Indian travel company MakeMyTrip Limited (NASDAQ:MMYT).

4) A new e-book platform. DangDang launched its e-book platform in December for use on iPhones, iPads and PCs. 50,000 book titles are available and each sale should net the company 20 percent of the sale price. Writer Kevin Chen expects DangDang’s ebook sales to start manifesting themselves in the company’s earnings reports in Q2 2012.

There are warning signs, though. For one thing, DangDang’s already blown through a lot of price targets for the company. Brokerage analysts have set an average target price of $8.01 (per CNAnalyst). DangDang’s competition could IPO soon, too (see our 2012 tech IPO calendar for more).

Despite the challenges the company faces, and the fact that it controls just 2.3 percent of the of B2C ecommerce market in China, investors seem to have warmed back up to DangDang. Shares still haven’t hit my dollar-cost-averaged price, but it’s a step in the right direction.

HEADED NORTH?

Top 10 gold price predictions for 2012

THE NEXT APPLE?

The unofficial tech IPO calendar for 2012

A 500% GAIN?

$10,000 gold doesn’t sound that crazy anymore

DIY BUSINESS

Five cheap franchises to start with less than $10,000

OUR SHELVES ARE EMPTY

Silver coin shortage reeks of price manipulation?

THE GREAT WALL AROUND THE CHINESE YUAN

How to buy Chinese Yuan

Tags: AMZN, DANG, RENN, YOKU
Posted in Chinese stocks, Internet stocks, IPOs, tech stocks | No Comments »

Sep

2011

3 reasons to invest in the 360Buy.com IPO (Jingdong Mall)

by Fred Mason

In what’s shaping up to be the largest U.S. Internet IPO since Google, Inc. (NASDAQ:GOOG), the Amazon of China, Jingdong Mall has announced plans to go public. Jingdong publishes 360Buy.com, the 120th most-visited Web site in the world. That’s a far cry from Amazon.com (NASDAQ:AMZN), which is ranked by stats-tracking company Alexa.com as the 15th most-visited Web site in the world. 360Buy’s got momentum on its side, though, and that makes me bullish on the stock. Here are three reasons you should consider investing in 360Buy.com when the company IPOs next year:

1) Growth potential. China’s internet population (at 485 million+) exceeds the entire population of the U.S., and that number is expected to triple to 1.5 billion by 2015. That will make the leading e-commerce site in Asia an international powerhouse. Amazon.com currently gets 6.8 times as much traffic as 360Buy.com. But I wouldn’t be surprised to see 360Buy.com overtake Amazon. Not only will the China’s internet population dwarf that of the United States, but the country’s still in the early stages of e-commerce adoption. Last year, online sales in China rose 77 percent (per FT.com).

2) Not to be confused with Taobao.com. Taobao may get significantly more traffic than 360Buy.com, but it’s important to note that they have different business models. Taobao’s a consumer-to-consumer e-commerce site that’s more akin to eBay than Amazon. While eBay garnered more traffic than Amazon in the early years of the Web, that trend has since reversed itself. Expect the same pattern to unfold in China as consumers turn to the Web not just for hard-to-find items and collectibles but for everything from jackets to diapers and laptops (all of which 360Buy.com offers).

JingDong is, indisputably, the largest business-to-consumer e-commerce site. And it’s purest competition comes in the form of E-Commerce China Dangdang, Inc. (NYSE:DANG). DangDang, which IPO’d to much fanfare in December, has since lost nearly 75 percent of its share price amid a rash of accounting scandals at several Chinese firms.

3) Revenue giant. Revenue at 360Buy.com is expected to hit $4.4 billion in 2011 (per RenaissanceCapital). That’s not much when compared with Amazon’s $40 billion, but it blows away DangDang.com, which will likely do somewhere in the neighborhood of $400 million.

Already, 360Buy.com processes some 300,000 orders per day from 25 million registered users. If the site can maintain its handhold at the top of China’s retail market, it should reward investors nicely in the years to come.

TECH BOOM Top five best social media stocks	THE WHITE METAL When will we see silver prices at $50 oz. again? Sooner than you might think…
THINK AND GROW RICH Top 10 new investing books for 2011	NOT ALL MOBILE VIDEO’S THE SAME 3 reasons NOT to invest in the MobiTV IPO
THE ANTI-DOLLAR How to invest in the Swiss franc	THE WHITE METAL Why invest in silver?

Tags: 360buy.com, AMZN, DANG, GOOG, Jingdong Mall
Posted in Chinese stocks, Internet stocks, IPOs, NASDAQ, private companies, retail stocks, tech stocks | No Comments »

Sep

2011

3 reasons NOT to invest in the MobiTV IPO

by Fred Mason

First let’s talk about the good things. MobiTV hopes to raise $75 million from an IPO. That’s a decent chunk of change it can use to land new partnerships, acquire competitors, pay down debt and license new content. The company’s been in business since 1999 (which makes it ancient in the tech world), so its already proven its got some measure of staying power. If it can forge the right partnerships or develop a standalone product that’s less dependent on smartphone operators, it might be able to stay afloat.

MobiTV’s in one of the tech-world’s fastest-growing sectors. Just 10 percent of mobile users in the U.S. stream video, according to Nielsen. As more and more subscribers opt for smartphones, MobiTV doesn’t have to grab them all to make money. A decent slice of the fast-growing market should make it profitable in the years to come.

And now the not-so-good: 3 reasons NOT to invest in the MobiTV IPO

1) Heavyweight competition. MobiTV has an impressive client list – from Verizon Communications (NYSE:VZ) to AT&T (NYSE:T) and Sprint (NYSE:S) – but it also counts the likes of Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX) and Amazon.com (NASDAQ:AMZN) among its competitors. That means they’d better have some deep pockets or a distinct competitive advantage. And I’m not convinced MobiTV’s offerings are unique enough for the company to emerge as the leading player in the mobile video market.

Rather than offering video itself, MobiTV serves more as a plug-and-play platform that smartphone data providers can use to offer value-added video services. Who really needs additional video services, though, when you can buy exactly what you want when you want it? On my own iPhone, I tap into my existing Netflix account or purchase video directly from iTunes. During March Madness last year, I shelled out $20 and bought streaming rights for an NCAA app that allowed me to watch all 65 tournament games. I access content when I want it, and – in the process – sidestep the compulsory additional monthly charges MobiTV users are subject to.

2) Slow growth. Investors give the benefit of the doubt to tech IPOs that are losing money so long as a company’s growth rate is impressive. Between 2009 and 2010, revenue at MobiTV grew by a mediocre 6.8 percent. On top of that, losses actually climbed from $14.6 million to $14.7 million. That bumped up the company’s total debt obligations to $116.3 million.

3) Diversification wanted. That fact that MobiTV relies on three companies (Sprint, AT&T and T-Mobile) for the bulk of its revenue should give investors pause. Sprint alone accounted for 54 percent of the company’s revenues in 2010. And that partnership isn’t set in stone. A year from now, MobiTV’s deal with Sprint converts from an annual to a month-by-month contract. With an AT&T and T-Mobile merger on the horizon, they could be down to two primary revenue sources.

“If we are unable to renew our agreements with these customers on favorable terms, or at all, or if any of these customers were to terminate our agreement for any reason, our revenue would decline and our operating results and financial condition would be harmed,” MobiTV states in its S-1 filing.

MobiTV seem to see the writing on the wall: they’d best diversify their client base if they hope to keep the electricity flowing to their servers. That’s exactly where this IPO comes in. It’ll give them a fighting chance at forging new partnerships abroad, but it’s yet to be seen if that will be enough to give the company long-term viability.

TECH BOOM Top five best social media stocks	FIGHT BACK How to resist the new world order
THINK AND GROW RICH Top 10 new investing books for 2011	ONE IDEA TO RULE THEM ALL How to file a patent
THE ANTI-DOLLAR How to invest in the Swiss franc	THE WHITE METAL Why invest in silver?

Tags: aapl, AMZN, mobile stocks, mobile web, MobiTV, NFLX, S, T, VZ
Posted in Internet stocks, IPOs, private companies, tech stocks | No Comments »

Jun

2011

Do China Dangdang shares look attractive? (NYSE:DANG)

by Fred Mason

It’s been a rocky ride for shares in E-Commerce China Dangdang, Inc. (NYSE:DANG). Stock in the China-based online retailer debuted in December at $29.91 a share. Yesterday, those same shares closed at a new 52-week low of $15.56. That’s a drop of nearly 48 percent. Yet, I’m still optimistic about Dangdang’s future. Here are three reasons to consider buying into the so-called “Amazon of China” – even at today’s depressed prices:

1) Dangdang’s drubbing is temporary. One of the biggest reasons Dangdang’s shares have been falling comes down to simple supply and demand. Insiders who were previously locked out of selling their shares now have that right as the post-IPO lock-up expires. Just 19 million ADRs were trading last week. With the lock-up expiration, there are now more than 58 million ADRs on the market, per CNBC. Insiders who want to turn their paper holdings into currency now have that right, and it’s going to take the market a while to absorb that glut of supply.

2) Unrivaled sales growth. A recent report from SmarTrend named Dangdang the No. 1 Internet Retail stock in the world in terms of sales growth. Sales are expected to grow more than 113 percent from $375.9 million last year to $802.1 million in the next fiscal year. That puts DANG ahead of investor darlings like Netflix, Inc. (NASDAQ:NFLX), Priceline.com Inc. (NASDAQ:PCLN) and even Amazon.com, Inc. (NASDAQ:AMZN).

3) Setting the stage for even bigger growth. Dangdang’s aggressively expanding its product offerings, fulfillment facilities and accessibility as it faces fierce competition behind the Great Firewall. During an earnings call last month, Chairwoman Peggy Yu Yu made it clear the company’s not ready to start milking DANG for profits, but rather it’s fixating on setting the stage for future growth. We’ll “keep plowing whatever gross margin we make back into operations,” Yu Yu said.

Already, the scope of the site is expanding. Total orders surged 40.9 percent year-over-year last quarter, and the company’s total number of active customers grew by 42.3 percent. The site’s most impressive growth came from third-party merchants, with sales screaming up 242.9 percent. If those trends stay intact, Dangdang stands to make long-term investors a whole lot of yuan.

TECHNOLOGY IPO CALENDAR The unofficial tech IPO calendar for 2011	BEAR POKES HEAD OUT OF CAVE? 5 reasons LinkedIn’s stock is set to plunge (LNKD)
EAT YOUR HEART OUT, PAYPAL Three reasons to invest in the Square IPO (when it finally arrives)	JUST SAY NO TO GROUPON 3 reasons NOT to invest in Groupon’s IPO
AND YOU SHALL KNOW OUR WRATH DangDang (NYSE:DANG) founder labels Morgan Stanley ‘motherf**kers’	SKATE TO WHERE THE PUCK IS GOING How to buy Chinese Yuan

Tags: AMZN, DANG, NFLX, PCLN
Posted in Chinese stocks, Internet stocks, IPOs, tech stocks | No Comments »

Apr

2011

Top 11 best cloud computing stocks

by Fred Mason

We’ve come a long way from floppy disks. We have laptops, smartphones and iPads in our hands, and we want to access the same data across all three platforms. More importantly, we don’t want to have to waste time transferring data across platforms.

Enter the cloud – an ineffable server farm in the sky that safely stashes away our data, backs it up and spits it back at us on demand. It’s the next evolution in computing, and it promises to make a lot of companies from start-ups to Dow components a whole lot of cash in the years to come.

Research firm Forrester estimates the cloud computing market will balloon from $41 billion this year to $241 billion in 2020 (per the Wall Street Journal). Clearly, there will be some big winners in the space. Here’s our guess at the Top 11 best cloud computing stocks of 2011 and 2012 in no particular order:

1) Citrix Systems, Inc. (NASDAQ:CTXS).
YTD Performance: +12.8 percent
Citrix surged to a new 52-week high on Monday. With a market cap of $14 billion, it’s one of the largest (nearly) pure-play cloud computing stocks on the market. The company also peddles some of the white collar world’s most well-known cloud software in GoToMeeting and GoToMyPC.

2) Amazon.com, Inc. (NASDAQ:AMZN).
YTD Performance: +1.2 percent
Amazon, which counts Reddit, Foursquare and Quora among its clients, got into the cloud game early, and the company appears committed to maintaining a leadership position in the space – even at the expense of short-term profits. Just last month, Amazon launched its so-called “Cloud Drive.” Targeted at everyday consumers, the online storage space gives users a place to stash MP3s for access anywhere they’ve got a Web connection.

3) Acme Packet, Inc. (NASDAQ:APKT).
YTD Performance: +44.6 percent
Q1 was good for Acme Packet. The company reported record revenue north of $59 million and raised its guidance for the rest of the year. Acme delivers voice, video and multimedia for enterprise-level clients including big dogs like Verizon (NYSE:VZ).

4) ChinaCache International Holdings Ltd. (NASDAQ:CCIH).
YTD Performance: -15.7 percent
A fairly new cloud computing offering out of China, ChinaCache hasn’t gotten much love from the street since its debut on the NASDAQ in October. Shares have fallen 35 percent since then. If a rising tide lifts all boats, though, ChinaCache should do well. IDC predicts China’s cloud computing industry will clock a compound annual growth rate of 23.8 percent through 2014.

5) International Business Machines Corp. (NYSE:IBM).
YTD Performance: +14.8 percent
IBM has listed cloud computing among it’s top four revenue-growth initiatives (alongside analytics, emerging markets and digitizing infrastructure). The company’s putting its money where its mouth is, too. CEO Sam Palmisano said he plans to use about $20 billion on acquisitions through 2015 with a big chunk of that change allocated specifically to cloud computing (per WRALtechwire). If IBM can’t convince an enterprise-level company to adopt the cloud, no one can.

6) SAVVIS, Inc. (NASDAQ:SVVS).
YTD Performance: +41.2 percent
Word on the street is Savvis might be ripe for the plucking – especially after investors watched Verizon gobble up competitor Terremark Worldwide for $1.4 billion earlier this year. Savvis focuses exclusively on IT solutions for businesses and government agencies.

7) Aruba Networks, Inc. (NASDAQ:ARUN).
YTD Performance: +67.1 percent
Aruba’s emphasis on mobile networks makes its growth prospects particularly attractive. Goldman Sachs reiterated its Buy rating on the stock last month with a price target of $39 – a 14 percent premium over market value.

8) Rackspace Hosting, Inc. (NYSE:RAX).
YTD Performance: +39.8 percent
Looking a multi-year RAX chart is like looking at a ramp that’s pointing at the sky. Shares are up more than 124 percent over the past 12 months. A P/E of 126 might not be justified, but the company appears to be consolidating power as the go-to cloud hosting company in the U.S., and now Rackspace is ready to sink its jaws into Asia (per SeekingAlpha).

9) 21Vianet Group Inc (NASDAQ:VNET).
YTD Performance: -15 percent
The latest cloud computing offering from China to IPO in the U.S., 21Vianet started trading late last week. The company counts some of China’s biggest tech companies among its clients including Tencent, Youku and Taobao. After three days of trading, VNET’s shares have fluctuated between $17.50 and $21. Check out my post Cloud computing in China: Is the 21Vianet IPO a buy? (VNET) for more.

10) VMware, Inc. (NYSE:VMW).
YTD Performance: +7.1 percent
VMware gives companies the ability to build and deploy “virtual” computers for software testing, script automation and data storage. The company recently got a thumbs up from Susquehanna, which raised its price target on the stock to $120 per share on rapid international growth (per SeekingAlpha). That’s about 25 percent higher than VMW’s current share price of $95.

11) Google Inc. (NASDAQ:GOOG)
YTD Performance: -10.3 percent
As everyday consumers grow more accustomed to storing and accessing data from the cloud, Google could lead the way. The company’s popular Docs application lets users edit, share and store documents and spreadsheets online. Google’s mobile operating system, Android, will likely strengthen consumers’ ties with their Google accounts. Before we know it, we might be storing everything on Google’s servers with the heaviest users footing the bill for the rest of us.

THE FACEBOOK OF CHINA?

3 MORE reasons to invest in the RenRen IPO

MORE THAN A RALLY

Silver conspiracy rumors gaining street cred

WHY WAIT FOR AN IPO?

Crowdcube: How to invest in tech startups

HOTELS ARE SO PASSE

HomeAway IPO: 3 reasons to invest

THE FACEBOOK(S) OF CHINA

RenRen IPO’s biggest hurdle might be PengYou

TWEETING IN CHINESE

A Sina Weibo IPO could be in the works as China’s Twitter moves to Weibo.com

Tags: AMZN, APKT, ARUN, CCIH, cloud computing stocks, CTXS, GOOG, IBM, RAX, SVVS, VMW, VNET
Posted in Internet stocks, tech stocks | No Comments »

Mar

2011

Amazon stock analysis: 5 reasons to buy and hold in 2011 (AMZN)

by Fred Mason

Since the start of 2011, shares in Amazon.com, Inc. (NASDAQ:AMZN) have fallen nearly 3 percent, but the company’s prospects still look strong thanks to a growing product pipeline. Here are five reasons to consider adding Amazon stock to your portfolio today:

1) Welcome to the Cloud Drive. Amazon has a history of forging into new tech niches long before they’re popular. The best example of this is Amazon Web Services (AWS): Amazon’s paid cloud computing service wherein other companies pay Amazon for server space and computing infrastructure. AWS has attracted some impressive clients since it launched in 2006 including Nasdaq (NASDAQ:NDAQ) and The New York Times Co. (NYSE:NYT). Now, Amazon’s looking to take its cloud services to the common man. This week the company launched Amazon Cloud Drive. With Cloud Drive, anyone who wants it can get 5 GB of online storage for free. They can then use that server space to store music, videos and files online and access them from Web-enabled devices anywhere. If users end up needing more than 5 GB of storage, they’ll have to open up their wallets to Amazon.

2) It’s “Appstore” not “App Store”. Much to the chagrin of Google Inc. (NASDAQ:GOOG), Amazon launched its Android Appstore last week. Now, consumers can un-tether themselves from Google’s official Android Market, and download free and paid apps directly from an online retailer they’re already familiar with. Amazon stands to get a 30 percent cut of every paid app they sell. For the record, Google’s not the only one upset about the launch of Amazon’s Appstore. Apple Inc. (NASDAQ:AAPL), which has the name “App Store” trademarked, sued Amazon over its use of the word “Appstore.” Apparently, there are times when branding trumps the threat of litigation.

3) One nation under Kindle. The success of Amazon’s e-reader, the Kindle, has been remarkable. Amazon hasn’t released exact sales figures on the device, but it already sells more e-books than it does traditional paperbacks. “Since the start of the year, Amazon has sold 115 Kindle books for every 100 paperbacks,” PCWorld reported in January. The good times are rolling. In February, AT&T Inc. (NYSE:ATT) announced it would start carrying Kindles, and now there’s speculation that a new Kindle in the works will run on Google’s open-source Android operating system. That would have the power to transform the Kindle from an e-reader into a full-blown tablet computer that just might compete with Apple’s iPad.

4) For your fulfillment. Amazon’s shares took a tumble after the company reported weak revenue growth in its Q4 earnings report on Jan. 28. The numbers weren’t all that surprising to analysts, though, as the quarter’s traditionally weak for the online retailer, and Amazon’s in the process of expanding its fulfillment centers. “1Q margins are likely to disappoint but reflect the higher spend on fulfillment centers/IT needed to extend AMZN’s above-industry growth well into the future,” Youssef H. Squali, an analyst at Jefferies & Co., wrote in a note to clients. “We recommend purchase of AMZN especially on any dip.” Bigger fulfillment centers means better margins moving ahead, and – after the costs are absorbed – that should boost the company’s bottom line.

5) Growth in the People’s Republic. Amazon’s quietly been building its brand in China since acquiring the Chinese online bookseller Joyo.com in 2004. In 2007, Amazon changed the site’s name to Amazon.cn, and it’s now the 74th most-visited site in China, according to Alexa.com. That puts it just one slot behind one of its main competitors: the online bookseller and retailer E-Commerce China Dangdang Inc. (NYSE:DANG), which recently IPO’d in the U.S. and operates Dangdang.com. Even if Amazon doesn’t ultimately overtake DangDang.com, there’s more than enough e-commerce growth in China to grow Amazon’s coffers for years to come.

THE ULTIMATE CHINESE ANTI-VIRUS Is China’s Qihoo IPO a buy? (Ticker:QIHU)	MORE THAN FRIENDS 3 reasons to invest in FriendFinder IPO (FFR)
THE ULTIMATE CASH ‘STREAM’ Netflix stock performance predictions for 2011 (NFLX)	THE OTHER FACEBOOK Five reasons to invest in the RenRen.com IPO
WHAT’S THE POINT? Why invest in silver?	TWEETING FOR DOLLARS Ad.ly: Mastering how to make money on Twitter

Tags: aapl, AMZN, ATT, DANG, GOOG, Joyo.com, Kindle, NDAQ, NYT
Posted in Internet stocks, NASDAQ, NYSE, retail stocks, tech stocks | 1 Comment »

Mar

2011

Netflix stock performance predictions for 2011 (NFLX)

by Fred Mason

Twelve months ago, you could have bought a share of Netflix, Inc. (NASDAQ:NFLX) for $72. Let’s call those the good old days. Since then, Netflix has screamed up more than 200 percent with 26 percent of those gains coming since the start of 2011. A single share will now set you back $221.

My finance and I have an ongoing argument about shares in Netflix. She feels like the company has started exiting the growth phase with a one-way ticket to Value Stock Valley. Yes, she’s got some valid arguments: the company DOES face more realistic competition (ala Facebook, Amazon, Hulu, etc.) than it did a year ago, and I’ll readily admit they could use a better selection and more new releases (which will only come at the expense of margins). Still, I’m optimistic about Netflix’s stock performance in 2011. Here are three reasons why:

1) Global domination. A Credit Suisse note out yesterday titled “Don’t Stop Believing,” gave Netflix two very enthusiastic thumbs up with an analyst there upgrading the stock from Neutral to Outperform. The reason? International growth. Credit Suisse predicts Netflix’s subscriber base will triple to 69 million subscribers by 2016 on the strength of growth abroad.

Apparently, The Canada Experiment has been a good one so far. When Netflix opened its doors to subscribers in the north late last year, Credit Suisse predicted they’d reel in 300,000 subscribers by the end of 2011. That was a pitifully low estimate. After just six months, Netflix has 900,000 subscribers in Canada. Online streaming is the future, and there’s no one better positioned to capitalize on that future than Netflix – no matter what country you’re in. (FYI: Credit Suisse raised its price target on Netflix’s stock from $180 to $280).

2) One ring does not rule them all. Fears over Netflix’s competition feel overblown to me. It’s as if we believe people only want to stream video from a single source. Riiiiggght. I’ve got a Netflix account, but I still occasionally rent movies via Amazon’s online rental service. I still check videos out from the Blockbuster kiosk at my local Speedway, and very occasionally I log onto Hulu (even though the site’s ads make me want to vomit). Just because I can watch The Dark Knight on Facebook for a one-time fee, I’m not going to run out and cancel my Netflix account. We’re used to seeking out entertainment from multiple services. That’s not going to change because Facebook starts offering a small, boutique-y selection of movies.

3) Shoot the networks. In a move that could shift power away from networks and studios like HBO and Showtime, news broke last week that Netflix is wading into the content production pool. The company struck a deal with the film studio Media Rights Capital to produce an original series that will stream exclusively on Netflix servers starting late next year. Kevin Spacey will star in a political drama dubbed “House of Cards.” The series, which is being billed as “a satirical tale of power, corruption and lies,” will be directed by the rather brilliant David Fincher (whose portfolio includes The Social Network, Seven, Fight Club and The Curious Case of Benjamin Button). It’s a big roll of the dice for Netflix – and it’s one that I fully expect to pay off.

ADULTS ONLY .XXX registrar expected to bring in $200 million a year	WHAT’S THE POINT? Why invest in silver?
THE OTHER FACEBOOK Five reasons to invest in the RenRen.com IPO	PRECIOUS ETFS Top 10 best gold and silver ETF funds
TOO MUCH OF A GOOD THING IS GREAT 3 more reasons to invest in a Facebook IPO	TECHNOLOGY IPO CALENDAR The unofficial tech IPO calendar for 2011

Tags: aapl, AMZN, e-commerce stocks, Facebook, GOOG, NFLX, online stock
Posted in Internet stocks, NASDAQ, stock tips, tech stocks, trading stock | 1 Comment »

Posts Tagged ‘AMZN’

Five reasons to invest in the 360Buy.com IPO

Dangdang vs. Renren: Battle of the Chinese tech stocks

More arguments for Renren

To sum it up

Related

How high can Amazon’s stock go?

Future growth for Amazon

Amazon stock price target

Related

Why are E-Commerce China Dangdang’s shares on fire?

Related

3 reasons to invest in the 360Buy.com IPO (Jingdong Mall)

Related

3 reasons NOT to invest in the MobiTV IPO

And now the not-so-good: 3 reasons NOT to invest in the MobiTV IPO

Related

Do China Dangdang shares look attractive? (NYSE:DANG)

Related

Amazon stock analysis: 5 reasons to buy and hold in 2011 (AMZN)

Related

Netflix stock performance predictions for 2011 (NFLX)

Related

Killer Articles

Top 10 best gold and silver ETF funds

3 reasons NOT to invest in Groupon’s IPO

From start-up to titan: The unofficial tech IPO calendar for 2012

How to invest in water stocks

World’s largest economies in 2050 will look very different

How to invest in cotton stocks

How to buy Chinese Yuan

Five cheap franchises to start with less than $10,000

Why invest in silver?

How to Invest in Copper

Archive

Tag Cloud

Blogroll