DTEJD1997 Posted January 20, 2018 Share Posted January 20, 2018 Hey all: I finally got to go to a Whole Foods Market in Birmingham MI. I was generally impressed. The store was pretty much fully stocked...I would guess that 99% of stuff was in inventory and on the shelves. This store moved locations about 1/2 a mile further down the road into a larger location that was probably custom built. Previously, they had been in a "regular" grocery location. This new building is physically larger & better laid out. The actual LOCATION might be slightly worse? It is in a mildly upscale neighborhood. I found it clean, well staffed and generally well run. Most of the employees looked "OK"...a couple of them looked stressed, but not more than any regular store? Nobody, at first glance, appeared to be freaked out working for AMZN. I actually wound up buying more than I initially expected. I was waylaid by some "free samples" of "SUPER JUMBO SHRIMPS" which were quite delicious. I could not help myself, I ate a bunch and bought some to take home & eat over the weekend. I also bought some other things from established brands that I have NEVER seen in other stores. So perhaps WFM is superior in this aspect? I DID NOT get the Indian TV Dinner (chicken Tikka Massalla) that I initially wanted. They were priced WAY higher than Kroger...and Kroger sometimes has them on sale. There appeared to still be some local/regional brands & offerings that would be hard to find elsewhere. The seafood & butcher looked to be EXCEPTIONALLY well stocked, with high quality offerings. Produce looked OK, but some of the prices for stuff was "silly". Prices overall were quite a bit higher than Kroger and competitors in general. Some things were OK, but very, very few things were a "bargain". As compared to a few years ago, prices are most certainly lower. HOWEVER, they are still well above the competition. The fresh & hot food offerings looked OK/GOOD, but not exceptional. Most (not all) of the shoppers looked to be part of the "frou frou" or prosperous type. I would go back if I were in the neighborhood OR needed something special. It is well stocked, well run, expensive grocery store. The problems reported by BusinessInsider & other websites? I did not see them at all... HEY ALL: One interesting update? I just had some of the "Super Jumbo Shrimps" for lunch. They were not anywhere near as good as the stuff they put out for sample! They are edible, but just barely. The rest of the ones that I did not eat will be going into fried rice tonight! I asked the clerk how long they would last in the refrigerator...she said to eat them by dinner Monday. There is no way that I think that would a prudent course of action. What is not eaten tonight goes in the trash. I don't know if I got different stuff than what was put out on sample OR was it just the display's magic properties luring DTEJD1997 to eat free Super Jumbo Shrimps? Who knows? What I do know is that I WILL NOT be buying shrimp at Whole Foods again! Link to comment Share on other sites More sharing options...
Liberty Posted January 23, 2018 Share Posted January 23, 2018 https://www.recode.net/2018/1/21/16913984/what-does-photos-amazon-jeff-bezos-seattle-new-no-cashier-line-grocery-story-amazon-go https://stratechery.com/2018/amazons-go-and-the-future/ Link to comment Share on other sites More sharing options...
Liberty Posted January 26, 2018 Share Posted January 26, 2018 https://www.bloomberg.com/news/articles/2018-01-26/jd-enlists-tencent-as-it-prepares-to-take-on-amazon-in-the-u-s Link to comment Share on other sites More sharing options...
Jerry Capital Posted January 26, 2018 Share Posted January 26, 2018 I don't think this is a large or even small concern from Amazon. While there is a non-zero probability of them capturing some portion of continued growth of e-commerce retail sales I would note that Alibaba is already in North America. In Canada Alibaba has roughly 10% the e-commerce sales as Amazon, and 50% of Walmart. I would guess less in the United States on a percentage basis do to Canadian demographics largely favoring a Chinese e-commerce. The real "battle" between the two companies will come in India. An analogy you can lean on comes from when the Chinese e-commerce scene was developing. The leaders like eBay got smoked by the domestic upstarts because they understood the local consumer much better (this is well explained in the book Alibaba: The House that Jack Built). I don't see a lot of Americans using Alibaba or JD much the same way that Amazon hasn't been successful in China for the exact same reasons. Link to comment Share on other sites More sharing options...
DTEJD1997 Posted January 30, 2018 Share Posted January 30, 2018 Hey all: A small update... I consumed some "house brand" pasta sauce that I got at WFM. WORST....PASTA....SAUCE....EVER.... Even though it was only a few dollars per bottle, it was almost like water with bits of mushroom, tomato & spice in it. WTF are these guys doing? Putting their name on a product like that is damaging their brand. This stuff was cheaper/worse than the $.89 stuff in a can. Whole Foods is the worst quality I've ever bought in a store for pasta sauce...not even close. Combine that with the sketchy jumbo shrimps and these guys are looking kind of sketchy... I am somewhat turned off by this....why pay extra money to shop in a nice store but you ultimately get an inferior product? I now question if I will go back. IF I DO, I most certainly will NOT be buying house brand stuff or seafood. Link to comment Share on other sites More sharing options...
Pauly Posted January 30, 2018 Share Posted January 30, 2018 Hey all: A small update... I consumed some "house brand" pasta sauce that I got at WFM. WORST....PASTA....SAUCE....EVER.... Even though it was only a few dollars per bottle, it was almost like water with bits of mushroom, tomato & spice in it. WTF are these guys doing? Putting their name on a product like that is damaging their brand. This stuff was cheaper/worse than the $.89 stuff in a can. Whole Foods is the worst quality I've ever bought in a store for pasta sauce...not even close. Combine that with the sketchy jumbo shrimps and these guys are looking kind of sketchy... I am somewhat turned off by this....why pay extra money to shop in a nice store but you ultimately get an inferior product? I now question if I will go back. IF I DO, I most certainly will NOT be buying house brand stuff or seafood. I think the argument would be that the cheap house brand sauce at WFM is not a gourmet product, but it will have simple, clean ingredients. Check the ingredient list on the $0.89 competitor and see how many preservatives/chemicals etc are in it. Out of Cheap, Healthy, and Tasty... you can choose two. Link to comment Share on other sites More sharing options...
Liberty Posted January 30, 2018 Share Posted January 30, 2018 Amazon, Berkshire Hathaway and JPMorgan Chase & Co. to partner on U.S. employee healthcare https://www.businesswire.com/news/home/20180130005676/en/Amazon-Berkshire-Hathaway-JPMorgan-Chase-partner-U.S. Amazon (NASDAQ: AMZN), Berkshire Hathaway (NYSE: BRK.A, BRK.B) and JPMorgan Chase & Co. (NYSE: JPM) announced today that they are partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs. The three companies, which bring their scale and complementary expertise to this long-term effort, will pursue this objective through an independent company that is free from profit-making incentives and constraints. The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost. “The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers. But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes,” said Berkshire Hathaway Chairman and CEO, Warren Buffett. “The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” said Jeff Bezos, Amazon founder and CEO. “Hard as it might be, reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner’s mind, and a long-term orientation.” “Our people want transparency, knowledge and control when it comes to managing their healthcare,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase. “The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans,” he added. Link to comment Share on other sites More sharing options...
Liberty Posted January 31, 2018 Share Posted January 31, 2018 https://stratechery.com/2018/amazon-health/ Link to comment Share on other sites More sharing options...
DooDiligence Posted January 31, 2018 Share Posted January 31, 2018 https://stratechery.com/2018/amazon-health/ Beaten to the punch, yet again, by the forces of Liberty... Link to comment Share on other sites More sharing options...
Cigarbutt Posted January 31, 2018 Share Posted January 31, 2018 Thanks for the link. "Is this possible?" Tocqueville observation: "...events can move from the impossible to the inevitable without ever stopping at the probable." Link to comment Share on other sites More sharing options...
Jerry Capital Posted January 31, 2018 Share Posted January 31, 2018 Does anyone have any insight on the ranking for product searches on Amazon? When I do a search for "soap" the first two slots come up as sponsored (feeding into Amazon's growing advertising business). The next three are "best sellers" from three different subcategories (bath soaps, baby bar soaps, hand soaps). After that it is a seemingly more random collection of items. Similarly when I do a search for "towels" again the first two slots are sponsored. But then the next I see are a mix of best sellers and Amazon Basic products. How far down the product searches do you think Amazon will go with sponsored listings. I would think going passed two wouldn't be in their best interest. Link to comment Share on other sites More sharing options...
Liberty Posted February 1, 2018 Share Posted February 1, 2018 Q4: phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=2329886 Fourth Quarter 2017 Net sales increased 38% to $60.5 billion in the fourth quarter, compared with $43.7 billion in fourth quarter 2016. Excluding the $1.1 billion favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 36% compared with fourth quarter 2016. Operating income increased 69% to $2.1 billion in the fourth quarter, compared with operating income of $1.3 billion in fourth quarter 2016. Net income was $1.9 billion in the fourth quarter, or $3.75 per diluted share, compared with net income of $749 million, or $1.54 per diluted share, in fourth quarter 2016. The fourth quarter 2017 includes a provisional tax benefit for the impact of the U.S. Tax Cuts and Jobs Act of 2017 of approximately $789 million. Full Year 2017 Net sales increased 31% to $177.9 billion, compared with $136.0 billion in 2016. Excluding the $210 million favorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 31% compared with 2016. Operating income decreased 2% to $4.1 billion, compared with operating income of $4.2 billion in 2016. Net income was $3.0 billion, or $6.15 per diluted share, compared with net income of $2.4 billion, or $4.90 per diluted share, in 2016. Link to comment Share on other sites More sharing options...
KCLarkin Posted February 1, 2018 Share Posted February 1, 2018 Q4: phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=2329886 Fourth Quarter 2017 Net sales increased 38% to $60.5 billion in the fourth quarter, compared with $43.7 billion in fourth quarter 2016. Excluding the $1.1 billion favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 36% compared with fourth quarter 2016. Operating income increased 69% to $2.1 billion in the fourth quarter, compared with operating income of $1.3 billion in fourth quarter 2016. Net income was $1.9 billion in the fourth quarter, or $3.75 per diluted share, compared with net income of $749 million, or $1.54 per diluted share, in fourth quarter 2016. The fourth quarter 2017 includes a provisional tax benefit for the impact of the U.S. Tax Cuts and Jobs Act of 2017 of approximately $789 million. Full Year 2017 Net sales increased 31% to $177.9 billion, compared with $136.0 billion in 2016. Excluding the $210 million favorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 31% compared with 2016. Operating income decreased 2% to $4.1 billion, compared with operating income of $4.2 billion in 2016. Net income was $3.0 billion, or $6.15 per diluted share, compared with net income of $2.4 billion, or $4.90 per diluted share, in 2016. I've been a skeptic on Amazon's valuation. I was wrong. I always estimated long term 20% growth -- assuming that the fake "law of large numbers" would eventually apply. But clearly, this beast will surpass those estimates for a long time. I still don't know how to value this bloody thing but I was wrong. Congrats to all longs. Link to comment Share on other sites More sharing options...
Cardboard Posted February 2, 2018 Author Share Posted February 2, 2018 "You had Amazon.com last week missing on quarterly earnings, sales and Q4 forecasted sales. I should not say missing earnings because they generated losses. The stock went down briefly after hours then up huge the next day. If it had been Chipotle or any other momo stock it would have been down 20%. Incomprehensible. They had to find some excuse for the move so they talked about some mysterious beat on operating margins. I guess it had to be NA adjusted operating margins! I actually think that Amazon is a fraud. If the stock market did not keep it high, they would have to show profits like Target, Walmart, BestBuy or any other retailer. Retailing is still their main business. Now, that the stock market keeps rewarding them just for showing sales growth, they can keep selling product at cost or below cost. Isn't illegal? With the sales tax advantage disappearing and them building warehouses everywhere to shorten delivery times, there is really no difference anymore in their retailing business with other brick and mortar retailers. There are also other issues, but that is for another discussion or thread." Well, here is the thread! This company should be shorted into oblivion by Einhorn, Chanos and all others if they had balls. The stock market allowing this company to sell its products at a loss is creating huge issues for honest companies such as Wal-Mart, Target, Best Buy and many others who have to sell their goods at a profit to offer a return to their shareholders. Even Overstock.com has to show a profit. Apple is also suffering from this scheme since they have to sell their IPads at a profit to deliver to their shareholders. Apple's price to earnings ratio is around 11.5 now without even factoring in the very large cash pile and they are growing as fast as Amazon sales. Amazon on the other hand can sell its Kindles at a loss or near breakeven to generate sales growth and still enjoy an increasing stock price. The issue is that this goes for all their products. All of that is based on gaining market share and eventually generating massive free cash flows as claimed by Mr. Bezos. The math simply does not add up. We are talking about a $100 billion market cap retailer with around $62 billion in sales. This is as big as Target now in terms of sales. Moreover, they are already worldwide. As we have seen recently, the rate of sales growth is coming down despite their large investments in more distribution centers and their venturing into more and more fields. If it was a conglomerate, people would trade it at a discount until management decided to re-focus in certain areas. Regarding growth, they will bump against the law of large numbers as Wal-Mart did once it reached such sales number. I think we are at the beginning of this process. If it was a small tech company or one with a truly innovative offering, I could understand the stock to trade higher based on sales growth and the promise of future profits at high margins. However, here we are talking about a company with a market cap of $100 billion plus, generating losses and with very low operating margins, and that is when they are visible. It is retailing after all. Try finding a $100 billion market cap showing no profit on on-going basis. The disclosure on top of that is abysmal. I challenge you to tell me how much debt they had on their balance sheet as of Sept 30. While it may not be so important a number to know, for now anyway, this kind of opacity is everywhere in their disclosure. Analysts have complained about it, but they still put out very attractive targets for the stock. Why exactly remains a mystery to me. Their cloud division is another joke. While it is used by many startups and others, it does not appear to be generating much profits either. The game is all about generating more and more revenues at break-even. It kills competition and is only possible because the stock market rewards them doing that. The music will stop some day. Will it be due to the collection of sales taxes, retailers matching their prices, an inevitable slow down in sales growth, the stock market finally taking a show me approach or some force finally telling Amazon that enough is enough? Cardboard" That was my initial post on Amazon in November 2012 and I still believe that most remains intact and valid. Sure, the stock has gone up what? 6 times since then and some likely think I am a dumb ass. But wait, they still trade at over 200 times earnings and over 150 times operating income and now show a near $700 billion price tag. So they never grew into their valuation. You can now buy more than two Wal-Marts for this price tag, almost Google or Apple with their billions of profits and cash. This is simply a case of growth at any cost and Wall Street keeps applauding. Now, they are talking about healthcare or another area of growth that I assume will come with zero profit. Maybe that at a $2 trillion market cap Wall Street will demand profits and dividends? When will government inquire about predatory practices, monopolistic ambitions? In any case, if the law of large numbers no longer apply to the business model, complexity, bureaucracy, etc. it will at some point apply regarding market cap. When the last buyer has bought, it is over no matter what it is. Even the multi-trillion dollar U.S. real estate market demonstrated that in the mid-2000's. Cardboard Link to comment Share on other sites More sharing options...
DeepSouth Posted February 2, 2018 Share Posted February 2, 2018 Income statement investing driving 35%+ and accelerating top line growth while margins are inflecting higher and the company still has seemingly limitless reinvestment opportunities (India, AWS, advertising, logistics, media, etc), all internally funded with a sticky consumer subscription platform to boot. You can spend a lot of time discussing valuation but if you can't understand the strength of the company and why it's investable no one can save you. Link to comment Share on other sites More sharing options...
ScottHall Posted February 2, 2018 Share Posted February 2, 2018 Income statement investing driving 35%+ and accelerating top line growth while margins are inflecting higher and the company still has seemingly limitless reinvestment opportunities (India, AWS, advertising, logistics, media, etc), all internally funded with a sticky consumer subscription platform to boot. You can spend a lot of time discussing valuation but if you can't understand the strength of the company and why it's investable no one can save you. +1 Cardboard I used to have the same mental block as you. Then I got on the growth train and it has been CHOO CHOO ever since Link to comment Share on other sites More sharing options...
Guest Cameron Posted February 2, 2018 Share Posted February 2, 2018 I know its not fun to talk about accounting when it pertains to Amazon, and rehashing old points on fundamentals when it comes to this company is a fools errand but they continue to grow AWS with off balance sheet financing. Their real free cash flow was down 48% for the year, at 3.3B which put it at a cool 207x TTM Free cash flow. If they actually wanted to acquire the assets they finance their capital leases with cash than they would have reported a negative 1.5B in free cash flow. I wish I could say the financing they are using at the moment is just growth capex or some other justification and their maintenance Capex is far lower but servers have to be replace fairly quickly. I'm not too sure what income statement investing is, but I assume that mean's the amortization that occurs because of these fast moving capital leases which puts a blemish on the income statement since when you add up all the depreciation and amortization that Amazon has their average asset life is somewhere around 7 years. So people do have a point when they say they mess with their GAAP earnings but its a two way street. They get to front load their operating cash flow with all the depreciation and amortization and the outflows go to the financing section of the cash flow statement instead of the investing section. I realized that there was probably no point in writing this anyway, Good luck to those invested. Link to comment Share on other sites More sharing options...
frugalchief Posted February 2, 2018 Share Posted February 2, 2018 http://www.businessinsider.com/how-whole-foods-uses-scorecards-to-punish-employees-2018-1 OTS sounds amazing. Link to comment Share on other sites More sharing options...
clutch Posted February 2, 2018 Share Posted February 2, 2018 Cardboard, "You don't have to have opinions on everything" - Buffett Maybe this one is just outside of your circle of competence. Link to comment Share on other sites More sharing options...
Liberty Posted February 9, 2018 Share Posted February 9, 2018 Couple more bits of news: https://www.reuters.com/article/us-amazon-brazil-exclusive/exclusive-amazon-eyes-new-warehouse-in-brazil-e-commerce-push-sources-idUSKBN1FT2HM https://www.reuters.com/article/us-delivery-service-amazon/amazon-tests-delivery-in-los-angeles-shipping-shares-sink-idUSKBN1FT2DI https://www.theinformation.com/articles/amazon-is-becoming-an-ai-chip-maker-speeding-alexa-responses https://www.wsj.com/articles/amazons-latest-ambition-to-be-a-major-hospital-supplier-1518517802 Link to comment Share on other sites More sharing options...
Liberty Posted February 20, 2018 Share Posted February 20, 2018 As predicted: http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=2333196 Prime Members Now Earn 5% Back When Shopping at Whole Foods Market Using the Amazon Prime Rewards Visa Card Also launching some generic OTC products: https://www.cnbc.com/2018/02/20/amazon-has-quietly-launched-an-exclusive-line-of-over-the-counter-health-products.html Link to comment Share on other sites More sharing options...
Cigarbutt Posted February 21, 2018 Share Posted February 21, 2018 Whether Amazon is felt to be investable or not, it has become an inescapable variable to consider in many fields. Interesting perspective of the impacts: https://www.adventur.es/gorilla-battles-q1-2018-amazon Link to comment Share on other sites More sharing options...
Liberty Posted February 27, 2018 Share Posted February 27, 2018 https://www.cnbc.com/2018/02/27/amazon-buys-ring-the-smart-door-bell-maker-it-backed-through-alexa-fund.html Link to comment Share on other sites More sharing options...
Liberty Posted March 5, 2018 Share Posted March 5, 2018 https://www.cnbc.com/2018/03/05/amazon-in-talks-with-jp-morgan-other-banks-about-branded-checking-account-wsj.html Link to comment Share on other sites More sharing options...
Liberty Posted March 7, 2018 Share Posted March 7, 2018 https://www.ft.com/content/4be349c6-1594-11e8-9c33-02f893d608c2 FT Q&A with Andy Jassy, AWS head. Link to comment Share on other sites More sharing options...
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