I’d decided to ring the register last Friday, 8-Dec-2006 on the giant online-bookstore, Amazon (Nasdaq : AMZN, quote). Most of the analysts were shying away from this stock given that it hasn’t proven that it can grow profitably. In fact its’ operating margins slipped to 1.7%, from 2.2% last quarter.
While the profit margin is thin, it has over-stepped into area not its’ domain such as grocery, auto-parts and so on. on 27-Nov-2006, the P/E (price earning ratio) was at 48 times estimated 2007 earnings of 70 cents per share which is quite expensive. The down-side over-whelmed any upside, so I decided to buy “Put” position (Apr 2007 42.5 Put).
Though this stock might have more down-side after the consolidation from $ 42 to current $ 38.45, it’s always advisable to take-profit whenever the opportunity exists. Always remember that:
-
Bull & Bear makes money, Pig gets slaughtered
Other Articles That May Interest You …
December 10th, 2006 by financetwitter
|
Comments
Add your comment now.
Leave a Reply