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by Joseph Hargett | June 2, 2021
Prime Days are here again as the summer earnings grow. I’ve got my Echo, I’ve got my Fire TV Stick. What my wife buys … who knows?
I said it’s all right. You know it’s all right. Savings are falling apart. Is that the way this should start?
That’s right, Great Ones: Amazon.com’s (Nasdaq: AMZN) Prime Days are upon us once again.
Days? You mean Prime Day, right? Also … nice Zeppelin intro!
Thank you! And nope — I mean days. This time, it’s Amazon Prime Days … with the world’s largest online retailer announcing that this year’s event will span both June 21 and 22. It’s “two days of epic savings!” according to Amazon.
In the past, I might have believed it. Do you remember when Prime Day featured massively discounted big-screen TVs? Laptops? PCs? Video game systems? Books and media? Pepperidge Farm remembers … there were discounts for every taste and preference.
Now, Echos, Fire TV sticks and Fire Tablets fill Prime Day’s best deals. It’s kinda sad, really.
You’ll have to excuse me, but I’m all full up on corporate surveillance products right now, thank you.
That said, I’m sure there are many shoppers out there just salivating over discounted Amazon products. I mean, the company raked in $3.5 billion during Prime Day last year … and it was even delayed until October.
So, despite my growing disdain for Prime Day … surely this massive sales day will have some impact for investors, right? After all, big numbers surrounding overhyped events are what Wall Street lives for.
Well, about that… Last year’s $3.5 billion in Prime Day sales was a 60% surge over 2019 levels, but AMZN stock barely budged on the news. In fact, AMZN hasn’t gone anywhere in the past year. Since June 2020, AMZN has been locked between $3,000 and $3,500. That’s roughly a 16% trading range.
What’s more, this stagnation is happening during an Amazon sales boom. Pandemic lockdowns have juiced the company’s revenue as people are unable to leave their houses to spend that sweet, sweet pandemic relief funding.
Furthermore, Prime Day is now a known factor. Wall Street is already pricing in billions in Prime Day sales. So, unless this year’s event completely obliterates last year’s 60% surge — which seems unlikely given the U.S. economic reopening — Prime Day will have little to no effect on AMZN stock.
Unless sales actually fall year over year. Perish the thought, but it’s worth noting that Wall Street already expects big year-over-year gains from Prime Day. If the lack of purloined pandemic purchases plunges from past performance, AMZN’s positively in a pickle.
Now, I want to make clear that this is a short-term event. If you hold AMZN in your portfolio, there’s no reason to get out. I said it’s all right. You know it’s all right.
AMZN is an excellent long-term, buy-and-hold stock. But … let’s just say that Prime Day offers very little in the way of bullish motivation and, in fact, carries potential downside risk due to elevated expectations.
I guess it’s all in my heart, but if you have any thoughts on Amazon Prime Day, be sure to write in and let me know: GreatStuffToday@BanyanHill.com.
Editor’s Note: “Solar-on-Demand” Set To Power $16 Trillion Energy Revolution
This new technology is being hailed as a game-changer. It allows solar power plants to absorb much more energy during the day and pump it back out whenever it’s needed … even hours after the sun’s gone down.
In short, it makes solar power work “on demand.” And now, the world’s billionaires are scrambling to get in on it… Click here to see why.
It looks like Etsy (Nasdaq: ETSY) is finally tired of selling bootleg screen-printed t-shirts, hoodies and facemasks.
The company announced this morning that it’s buying British secondhand clothing app Depop for $1.6 billion.
Ironically, that’s still cheaper than a custom-made Corpse hoodie and easier to get than an official one. (I’ll be impressed if any Great Ones have heard of Corpse … he’s not for everyone, just saying.)
But, like Corpse, Depop is a Gen Z phenomenon. Roughly 90% of the app’s active users are under the age of 26. It’s also the tenth most visited Gen Z shopping site for U.S. consumers.
“We see significant opportunities for shared expertise and growth synergies across what will now be a tremendous ‘house of brands’ portfolio of individually distinct, and very special, e-commerce brands,” said Etsy CEO Josh Silverman.
So, Etsy has gone from the purveyor of mom-and-pop crafts (aka silkscreened t-shirts) to a “house of brands.”
This is probably good for investors, especially since Wall Street sent ETSY more than 3% higher on the news.
However, I doubt this news — especially the “house of brands” thing — will go over well with most of Etsy’s sellers. And I know those people are going to write in to Great Stuff to tell me exactly why: GreatStuffToday@BanyanHill.com.
It is the springtime of my pot stocks … the second season I am to know.
Scott’s Miracle-Gro (NYSE: SMG) is the sunlight in my growing … so little gains I’ve felt before.
Wait … wait … I know this one … “Rain Song” by Led Zeppelin!
Fine, you caught me: SMG isn’t technically a pot stock. It’s cannabis-adjacent. But until the U.S. gets its hiney in gear about full-blown legalization … slinging these lawn-and-garden fertilizer stocks is what we’ve got.
While Canadian cannabis companies keep disappointing on the earnings front (sorry not sorry, Canopy), Scott’s out here destroying revenue and earnings expectations … and then raising them again!
That’s right: After SMG tore through the earnings box with its double-beat report last month, the company lifted its revenue and earnings outlook today for the rest of 2021. In particular, consumer-end products are selling like mad. Who knew people were so bored inside that even yard work is a thrill?
It gets better when you realize that 20% of Scott’s revenue is now coming from its Hawthorne product lines — i.e., hydroponic growing supplies geared toward budding pot producers. Hydroponic sales shot up 66% last quarter, and the company expects Hawthorne’s sales to grow another 40% to 45% for the rest of the year.
Some of you have written in to tell me you’re still gung-ho on pot stocks. Now, that’s all gravy with me (keep the rants coming our way, by the way), but I’m not willing to jump back into pot stocks just yet.
If I were investing right now with cannabis in mind, SMG is the type of play I’m looking for. Cannabis and cannabis-growing accessories are not its main revenue stream (yet), and the company isn’t subject to the same volatility of pot stocks that are barely breaking even.
It’s like the “safe” cannabis investment — regardless of whether the dang plant is legal in the U.S. yet or not. In that light, SMG’s 2% dip on today’s positive news might be a buying op to all ye pot stock holdouts out there.
Ambarella (Nasdaq: AMBA) by morning — Ambarella’s where I’ll be. When that sun is high in that Texas sky, AMBA’s buckin’ in the earnings confessional.
Did you just… Did you just go from Rihanna to George Strait? What the….
Ambarella’s the stock that lets computers see. Put short: It’s an artificial intelligence (AI) vision chipmaker.
Put not short: It makes chips that go into cameras, cars, sensors and whatnot to let AI “see” the real world. Then, the AI units can process images and video to make decisions on visual stimuli that computers couldn’t otherwise detect.
That’s like … giving the machines eyes, maaaan… That freaks me right out.
I swear, every time we bring up AI… This isn’t “Terminator-style” seeing so much as “let’s not hit Timmy with this self-driving car” seeing. And it’s blowing away earnings on every front.
Earnings hit $0.23 per share and beat expectations for $0.17. Revenue ticked up 28% year over year to reach $70.13 million, which also topped estimates. But is Ambarella — a chipmaker, no less — confident enough to make this a double beat and raise?
Oh yeah. Ambarella’s brimming with optimism like a 10-year-old who just discovered aftershave.
It noted the “significant supply-chain challenges” and promptly brushed those worries off its shoulder. Ambarella expects revenue will grow to between $74 million and $77 million for the current quarter, while analysts only expected $69.46 million. C’mon, analysts. So much precision to still be … wrong.
The company also expects its automotive division will double this year, scoffing at every other chipmaker’s doubts this earnings season.
What do you make of this, Great Ones? An under-the-radar chipmaker destroys expectations across the board, and AMBA’s down more than 2% today. The 2021 two-step lives on.
If you were looking for one stock to cover your AI and chipmaking bases … it looks like AMBA is the color of your energy.
Editor’s Note: Big Data & AI Used To Predict No. 1 Investment of 2020s
According to experts, “Imperium” is set to go from virtually unknown … to having 2 billion users in the next four years, launching a stock market gravy train almost nobody sees coming…
It’s Wednesday (my Great Ones) — the day we gather ‘round the virtual water cooler and hear you Great Ones sound off on the day’s hot-button issues.
In last week’s poll, we asked for your take on the now-overcrowded streaming space — namely, who will dominate the live sports streaming shebang. The top choice according to Great Ones? Disney (NYSE: DIS), with 38% of the vote.
I’m not bothered. I’m just … surprised? Are y’all that into ESPN+ or just that gung-ho about Disney? I know, I said “never underestimate the Mouse” about a million times over the past week, but maybe y’all went one sip too far with our own Kool-Aid…
Even I haven’t counted Fubo out of the fight yet — and neither have 35% of you Great Ones. Amazon, with its fingers already in the live-sports deal cookie jar, was the top streaming choice for another 21.6% of y’all.
Oh yeah… Netflix is out there too. Somewhere. Probably wondering what live sports it could nab the rights to (maybe underwater arm wrestling or the ostrich races … which would make Netflix “The Ocho” of sports streaming).
5.4% of you think Netflix is set for a comeback from languishing around the original content ether. Again, I’m not judging here — if anything, I gotta hear more from you. Hit me up in the inbox with why you think Netflix (or Amazon, for that matter) has a chance in the sports streaming market.
And on that note … this week’s poll!
If you didn’t skim through the rest of today’s Stuff (you know who you are), you probably get the impression I’m not the biggest AMZN bull in the bunch, and I’m not quite fond of Prime Day … to put it lightly.
Try not to let that color your opinion too much because I’m dying to hear your thoughts on the Almighty ‘Zon … before its Prime Dancing Days are here again.
Have you been waiting all year, counting down the days till the next Prime Day? Or are you fed up with Amazon’s yearly yard sale like me?
Click below and let me know what you think:
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Also, I know you’ve got more thoughts brewing out there … some rants stewing on the back burner. Let me know what’s crossing your mind this week, market-related or otherwise!
Drop us a line right here: GreatStuffToday@BanyanHill.com. We’d love to hear from you!
In the meantime, here’s where you can find our other junk — erm, I mean where check out some more Greatness:
Until next time, stay Great!
Editor, Great Stuff