Amazon is EXTREMELY overvalued

Published: April 30, 2007, 11:51 pm

Tags: stock, investments, financial, stock pick, amazon com, amazon, finance, earnings, stocks

Take a look at this chart. Amazon.com recently shattered analysts expectations, reporting 26 cents per share vs. 15 cents per share in net income. Is this reason enough to buy the stock? You tell me.The company rose from 44.75 to 62.78 in a matter of two days. That is over 18 dollars or a 40% gain. Earlier in the week the company was valued at $15b, which soared approximately to $25b. Many short-sellers ran to cover their positions. With two analyst downgrades, within the last three days, the stock is still trading above 60. It seems that traders are focusing on the present and not the future. While I like the company for a longer term investment, shares have risen too qickly and these price levels are too high. I wouldn't be surprised if this stock retraced to the early - mid 50's range within the next three to five months. (Chart courtesy of Yahoo.com)

[ Full article ]

Blog link

Rating: 0

Comments