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There is never a dull moment is there? This morning out of left field Amazon (AMZN) announced it was buying Whole Foods (WFM). Which sent both stocks up.
AMZN Price data by YCharts
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Which sent the other grocers, Wal-mart (WMT), and Costco (COST) sharply lower.
COST Price data by YCharts
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HAIN Price data by YCharts
Makes you think this a net negative all around, well except for Amazon. Potentially, or did Amazon make a mistake? Time will tell, just ask yourself how much more Margin can Amazon squeeze? WFM had $15.72 Billion in Revenue in 2016 and net income of $507 million, that is 3.2 percent. Ocado, an on-line grocer in the UK, had total revenue in 2016 of £1.27 billion and before tax income of £12.1 million. Just a thought. Different market, different pricing power, different market share. I know.
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Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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Mott Capital's Market Chronicles January 10, 2025 12:02 PM