Apple vs. Amazon: The Ground Is Shifting

NEW YORK ( TheStreet) -- I've written often about Apple ( AAPL) and Amazon ( AMZN) over the past few months. It hasn't been fashionable to be bullish about Apple and bearish on Amazon. However, after watching enough companies like Baidu ( BIDU) and Crocs ( CROX), I have learned to stick to my guns.

Stocks fall into and out of favor at times, forcing the price to move along with the herd, and I, for one, am glad. Money couldn't be made if stocks weren't mispriced. Actually, it's probably more true that stocks stumble into "fair value" on occasion.

I know what you're going to say: "Fair value" is subjective, and that subjectiveness induces emotional decisions. Once we include emotion in the selection process, logic is, by definition, no longer the master compass.

I'm not surprised that Apple was up strongly Monday on a rather weak day for the market. The S&P 500 ETF SPY ( SPY) gapped lower on news about an economy that is smaller than Apple in terms of economic importance.

Are rumors of an increase in its dividend driving the price higher? Maybe, but if it weren't for rumors, it would be something else. The simple fact is that the media has whipped and kicked this dead horse for all it's worth, and now has moved on. Those who wanted to downgrade the stock have (often a bullish signal in itself), and the naysayers have found the next cool thing to bash.

Has Apple turned into a "value" stock from a growth story? Maybe, but you can call Apple a value stock all you want, and the numbers still demonstrate growth. It wasn't lost on some of us that Apple just reported its best quarter ever.

In addition, Apple sports a 2.4% dividend yield in what may be the safest dividend in the entire solar system. Apple has a payout ratio of about 10% and enough cash to keep the dividend checks coming long after I put in my last trade.

Has the Apple express left the station, leaving you wondering if there is room to grow? No, not at all, we are likely to start seeing the move higher now. The 200-day moving average is $586 and, using technical analysis, there isn't a lot of resistance from here to there.

The moving average will gradually work its way lower even as Apple moves higher, but with a reasonable $100 upside without strain, what other stock are you going to find with better prospects for growth (not value)? Plus, you get the "value" aspect thrown in for free.

Amazon, another great company for consumers, is the polar opposite in many ways, but not so much in others. I shop at Amazon like so many others, but I am also smart enough to check prices on eBay ( EBAY) and other sites before pressing the "complete order" button.

Rocco Pendola, a good friend and director of social media at TheStreet ( TST), and I have a bet with the price of Amazon. I bet Amazon will see $200 before it sees $300.

I don't recall the exact date of the bet, but it was over six months ago. Rocco has a valid point that he is willing to share with me. Amazon provides a great customer experience and leads in several market spaces.

Where we depart in our analysis is that I don't believe price-to-earnings ratios almost as high as the national debt can be overcome by a company that is as large as Amazon. Simply put, there isn't enough growth available anymore unless Amazon enters new markets

Even if Amazon does, any market will have to be very large to have a meaningful impact on earnings.

Without a game-changing event, Amazon will have its hands full just trying to remain profitable, much less earn enough that the stock becomes a "value" before imploding. Short sellers have largely avoided Amazon because they haven't smelled blood yet. But once the cracks in the recent stock-price support become more apparent, sellers will unload shares, and there will be fewer buyers stepping in.

Disclosure: The writer holds no positions in any stock mentioned except for TST.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.