Not long ago, Amazon.com (AMZN) was the name that could do no wrong. No profits? No problem! But that's changed pretty abruptly in 2014, as razor-thin margins suddenly became less tolerable for investors in the world's biggest online retailer. Year-to-date, AMZN is down more than 23% -- and funds have been selling shares all the way down. In the first quarter, funds sold 1.29 million shares of Amazon, unloading a nearly $400 million stake at current price levels.
That's enough to make Amazon the most-sold name on our institutional selling preview.Amazon is the largest online retailer, moving $74.5 billion worth of merchandise last year. The firm's reach goes beyond traditional e-commerce, however; AMZN also owns a growing streaming service and a device ecosystem through its Kindle e-readers and tablets. Amazon is additionally one of the largest cloud computing names through its Amazon Web Services unit. For years, Amazon has sacrificed margins for growth, commoditizing countless products and selling Kindles at or below cost to drive consumption of digital media. The idea is that AMZN can suddenly flip a switch and ramp up margins -- but the question of whether customers will remain sticky is less clear. For now, AMZN has lost its momentum but it retains a very lofty valuation. It makes sense to join the sellers in Amazon this summer.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV