3. Amazon's Air Force
Jeff Bezos wants a fleet of drones to deliver Amazon's (AMZN) goodies. Well, in 2014 he's going to get it.
And not those Prime Air toy helicopters he showed off on 60 Minutes either. We're talking about the real thing.
Grab a pen and jot this down folks: Amazon is buying Textron (TXT) next year.
Keep those pens down while we run through some numbers.
Textron, which sports a market cap of $9 billion, sold $12 billion worth of Bell helicopters and Cessna aircraft in the past 12 months. Shares of the company are up 29% this year and it trades at a fairly inexpensive 14 times 2014 earnings estimates.
That's an easy pill to swallow for the $177 billion behemoth Amazon, which trades at 144 times next years profits and sold $70 billion worth of stuff last year. Not that Bezos cares too much about earnings considering the company posted a $41 million loss in the third quarter.
And as for why Bezos would opt for Textron and its Bells as opposed to scooping up United Technologies (UTX) for its Sikorskys?
Let's be honest. Even the perennially optimistic Amazon founder realizes that a UTX purchase would be biting off more than he could chew. UTX boasts a market-cap of $101 billion and Bezos knows he does not need the missile guidance systems in Black Hawk choppers to deliver the Sunday edition of the Washington Post.
Speaking of which, he bought that paper for $250 million on a lark. That's not the case here. When it comes to air supremacy, Bezos is dead serious.
Bezos sees the competition coming from Walmart.com. He knows selling books and DVDs just wont cut it anymore in this crowded online marketplace. Thats why he needs a powerful air fleet to deliver lawnmowers and washing machines directly to peoples doors.
We know from his Blue Origin spacecraft startup that Bezos speaks solemnly when it comes to the atmosphere. And were equally as earnest in our assessment that his next move skyward is purchasing Textron. And when pulls the trigger on that deal in 2014, remember that you read it here first.