Silver Ridge Resources says that investors are growing weary of Amazon’s apparent inability to post profits.
With Amazon’s disappointing 3rd quarter earnings report still ringing in the market’s ears, analysts at China-based broker-dealer Silver Ridge Resources believe more and more investors will be asking themselves just how much longer they can continue to give the world’s biggest online retailer a pass.
“We’re certainly asking questions,” said Rhys Quinlan, chief e-commerce analyst at Silver Ridge Resources. “One has to ask how it is that a company which has been around for 25 years still seems to find excuses for the lack of net profit when a company like, say, Alibaba – a decade younger – is posting knockout earnings and huge profits every quarter without fail,” he added.
Much of the answer lies in Amazon’s expenses. It has invested heavily in hardware like its Kindle e-reader, its “Fire” smartphone with a 3D screen and in things like setting up the infrastructure for delivering groceries in New York. The company’s operating expenses rose 37% compared with an increase in sales of just 20%.
The company’s stock price dropped 8% on the earnings announcement and, while Quinlan says he expects the stock to recover in due course, he doesn’t expect the company to slow the pace of expenditure.
“Amazon is busy establishing a footprint in other markets around the world like China. Penetrating those markets requires substantial investment especially given the near-complete dominance of homegrown players like Alibaba and JD,” he said.
Silver Ridge Resources says it still regards Amazon as a growth story and points out that with the stock price’s falls this year, the company is cheaper to buy than it has been for some time. “We’re just not sure how long investors’ patience will hold out,” concluded Quinlan.
About Silver Ridge Resources:
Founded in 2005, Silver Ridge Resources is an independent, full-service brokerage, investment planning and management concern committed to delivering innovative capital appreciation and preservation solutions to individuals and families with a high net worth. We place the welfare of our clients and their families first and we pride ourselves on having become the first port of call for their financial affairs. We consistently exceed our clients’ expectations by going the extra mile in terms of attention to detail, delivery of service and, most importantly, returns on investment.
From our headquarters in Shanghai, China and offices around the Asia Pacific region, we currently oversee the deployment of over $4.5 billion of assets on behalf of clients both in Asia and around the world.
Contact Silver Ridge Resources:
681 Haining Rd
Zhabei, Shanghai
200085
8675586243512
info@silverridgeresources.com
http://www.silverridgeresources.com