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Investor Movement Index April Summary

This article was originally published on TD Ameritrade's IMX page.

Monthly Summary

The IMX moved lower for the fourth month in a row, ending the period down 8.24 percent at 4.79.

The April IMX period started out with volatility in equity markets, and the IMX took another dip lower. Continuing their behavior for the past year, TD Ameritrade clients were net buyers during the period. However, many widely held positions saw their volatility relative to the overall equity market decrease once again, causing a decrease in the overall IMX score. Volatility of the S&P 500, as measured by the Cboe Volatility Index, or VIX, averaged over 20 for the first five days of April before subsiding near the end of the period.

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April began with equity market volatility, and all three major equity indices moved lower during the first five business days of the month. The S&P 500 traded lower by 2.2 percent during the first day of April, its worst start ever to a second quarter. Markets rebounded during the last three weeks for the period, with the S&P 500 ending the period up 1.10 percent. The NASDAQ Composite Index and Dow Jones Industrial Average also increased during the period, up 0.80 percent and 0.86 percent, respectively. Market volatility was in part driven by global economic concerns following the Trump administration's proposed tariffs on $50 billion of goods from China. Following the market selloff early in the period, the S&P 500 traded at the lowest price-to-earnings ratio in nearly two years compared to expected earnings over the next 12 months, although the metric is still higher than historical averages. Later in the period, geopolitical tensions in Asia seemed to ease and some solid corporate earnings helped push equity markets higher.

Trading

TD Ameritrade clients were net buyers during the April period, buying some volatile names during earnings season. Netflix, Inc. (NASDAQ: NFLX) was net bought for the third month in a row. The company reported better-than-expected earnings during the month, but traded lower after reports it may purchase a movie theatre chain. For the first time in 2018, AT&T Inc. (NYSE: T) was net bought as the company traded lower following an earnings miss due to cord-cutting increases. Spotify Technology SA (NYSE: SPOT) was also a net buy following the company's IPO early in the period. Advanced Micro Devices, Inc. (NASDAQ: AMD), which has seen volatility recently and posted an earnings beat, was net bought. For the fifth month in a row, Amazon.com, Inc. (NASDAQ: AMZN) was net bought. The company traded higher during the period on the back of an earnings beat and analyst upgrades. Square Inc. (NYSE: SQ), which was off approximately 20 percent from recent highs as the company announced an acquisition of another online company, Weebly, was also a net buy.

Additional popular names bought include General Electric Company (NYSE: GE), Alibaba Group Holding Ltd. (NYSE: BABA), and JPMorgan Chase & Co. (NYSE: JPM).

TD Ameritrade clients appeared to take some profits in multiple names during the period. Oil companies were popular sells with ConocoPhillips (NYSE: COP), BP  PLC (ADR) (NYSE: BP), National-Oilwell Varco Inc. (NYSE: NOV), and Transocean LTD (NYSE: RIG) all net sold. Oil prices traded near three-year highs on higher global demand and possible OPEC-led production cuts. COP and BP both traded at multi-year highs, while NOV and RIG reached 52-week highs, enticing clients to take profits in all four names. Alcoa Corp. (NYSE: AA) traded at levels not seen since before the financial crisis following proposed tariffs on steel and aluminum, and was net sold. For the third month in a row, Facebook, Inc. (NASDAQ: FB) was net sold after CEO Mark Zuckerberg testified before Congress regarding the misuse of user data and a beat on earnings.

Additional names sold include Starbucks Corporation (NASDAQ: SBUX), Chipotle Mexican Grill (NYSE: CMG), and Frontier Communications Corp. (NASDAQ: FTR).

Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.

Historical Overview

TD Ameritrade's Investor Movement Index (IMX) has generally correlated with the S&P 500 as clients react to equity price movements, but the index has gone through uncorrelated periods. Beginning in January 2010, when TD Ameritrade started tracking the IMX, the index rose with equity markets until April 2010, when it peaked at 5.40. In May 2010 investors experienced the "Flash Crash" and the IMX began a sharp downward trend. The IMX didn't reach 5.00 again until the S&P 500 was well above April 2010 levels.

The index eventually peaked at 5.56 in June 2011. This peak was immediately followed by a plunge in equity markets, and in the IMX, as the media was dominated by the U.S. debt ceiling debate, S&P downgrade of U.S. debt, and European debt concerns. The S&P 500 began to recover in the fall of 2011, but the IMX continued to decline until it reached a new low at the time in January 2012. As the S&P 500 began to sustain an upward trend in early 2012, the IMX started to rise. In 2013, as economic conditions improved and the S&P 500 climbed to record levels, the IMX rose to the high end of its historical range, finishing 2013 at 5.62, and continued to rise in 2014 amid geopolitical tensions related to Ukraine and the Middle East, until seeing slight declines in October and November.

By the middle of 2015, the IMX had seen increases, as equity market volatility had reduced to near historical levels while the market continued its upward trend. As 2015 ended its third quarter, volatility had returned to markets as global economic concerns and speculation around the timing and trajectory of Federal Reserve rate increases seemed to rattle overall equity markets. This uncertainty continued to play a role in the equity markets through the fourth quarter of 2015 and into early 2016. The volatility accompanying this uncertainty abated in the second quarter of 2016 and remained low until late in the third quarter. Just as it had in 2015, the IMX saw increases mid-year during the period of lower volatility. The IMX continued to climb into the fourth quarter reaching 5.83 in October 2016, its highest point in two years. A brief spike in volatility during November, timed around the U.S. presidential election, coincided with a slight pull back in the IMX, which then ended 2016 at the high end of its historical range.

The IMX started 2017 with an upward trend and reaching an all-time high in March, before pausing in April as lower volatility led to a decrease in the IMX. The momentum resumed in May, with the IMX breaching 7.0 for the first time ever in July of 2017. The IMX took another brief pause in September, before following markets higher and breaching 8.0 for the first time ever in November and ending 2017 at an all-time high. Volatility returned to the markets in early 2018, and the IMX decreased for three consecutive months to start the year.

Information from TDA is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade.

Have Walmart, Flipkart Tied the Knot?

According to a report at Bloomberg, the board of directors of India’s Flipkart e-commerce website has agreed to sell a 75% stake in the company to Walmart Inc. (NYSE: WMT) for about $15 billion. So far, neither Flipkart nor Walmart has confirmed the report.

The two parties have negotiated the deal for about a year now and, if the report pans out, Walmart would seal a victory over rival Amazon.com Inc. (NASDAQ: AMZN), which has also been wooing Flipkart in an effort to cement its position at the top of the heap in India’s massive market.

According to Bloomberg’s sources, the proposed deal would include the sale of Softbank Group’s stake of over 20% in Flipkart at a valuation of $20 billion. A final agreement is expected within 10 days, the sources said, but they warned that the deal is not certain.

Flipkart is the leading e-commerce player in India and Amazon is number two. One could argue that it is more important for Walmart to win the bidding for Flipkart if the U.S. retail giant wants to have a reasonable shot at winning a leading position in the global e-commerce sector.

Neither Amazon nor Walmart has made much headway in China’s e-commerce sphere, where Alibaba Group Holding Ltd. (NYSE: BABA) dominates. That makes India the last mega-opportunity, and neither Walmart nor Amazon wants to lose it.

Walmart currently operates 21 Best Price stores in India that are open only to wholesale customers on a membership basis, much like Sam’s Club and Costco. The catch is that under Indian law the stores are open only to wholesalers, not retail customers. Although Walmart plans to open another 50 Best Price stores, the addition of Flipkart would dramatically speed up market growth in India.

Other current investors in Flipkart include Microsoft and Tencent, both of which would retain small stakes in Flipkart if Walmart succeeds. A source told Bloomberg that Google parent Alphabet Inc. (NASDAQ: GOOGL) is “likely” to participate in the Walmart investment.

Walmart stock traded down about 0.2% early Friday, at $86.06 in a 52-week range of $73.13 to $109.98. The 12-month consensus price target on the stock is $105.40.

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5 Dividend Blue Chips to Buy for Safety During the Summer

Earnings Scheduled For May 4, 2018

Celgene Corporation (NASDAQ: CELG) is projected to report quarterly earnings at $1.96 per share on revenue of $3.46 billion.
Aon plc (NYSE: AON) is expected to report quarterly earnings at $2.8 per share on revenue of $2.93 billion.
American Axle & Manufacturing Holdings, Inc. (NYSE: AXL) is estimated to report quarterly earnings at $0.81 per share on revenue of $1.75 billion.
Alibaba Group Holding Limited (NYSE: BABA) is expected to report quarterly earnings at $0.88 per share on revenue of $9.27 billion.
LifePoint Health, Inc. (NASDAQ: LPNT) is projected to report quarterly earnings at $1.13 per share on revenue of $1.62 billion.
V.F. Corporation (NYSE: VFC) is estimated to report quarterly earnings at $0.65 per share on revenue of $2.90 billion.
Newell Brands Inc. (NYSE: NWL) is expected to report quarterly earnings at $0.26 per share on revenue of $3.05 billion.
Titan International, Inc. (NYSE: TWI) is projected to report quarterly earnings at $0.04 per share on revenue of $407.27 million.
Boise Cascade Company (NYSE: BCC) is expected to report quarterly earnings at $0.45 per share on revenue of $1.09 billion.
Cheniere Energy, Inc. (NYSE: LNG) is estimated to report quarterly earnings at $0.39 per share on revenue of $1.59 billion.
Cboe Global Markets, Inc. (NASDAQ: CBOE) is projected to report quarterly earnings at $1.24 per share on revenue of $308.05 million.
ITT Inc. (NYSE: ITT) is estimated to report quarterly earnings at $0.73 per share on revenue of $683.96 million.
Fred's, Inc. (NASDAQ: FRED) is expected to report quarterly loss at $0.19 per share on revenue of $551.00 million.
Virtu Financial, Inc. (NASDAQ: VIRT) is projected to report quarterly earnings at $0.52 per share on revenue of $288.31 million.
Cheniere Energy Partners, L.P. (NYSE: CQP) is expected to report quarterly earnings at $0.57 per share on revenue of $1.38 billion.
Genesis Energy, L.P. (NYSE: GEL) is estimated to report quarterly earnings at $0.32 per share on revenue of $710.05 million.
IDEXX Laboratories, Inc. (NASDAQ: IDXX) is projected to report quarterly earnings at $0.92 per share on revenue of $524.05 million.
CenterPoint Energy, Inc. (NYSE: CNP) is estimated to report quarterly earnings at $0.43 per share on revenue of $2.63 billion.
Buckeye Partners, L.P. (NYSE: BPL) is projected to report quarterly earnings at $0.81 per share on revenue of $911.27 million.
LCI Industries (NYSE: LCII) is estimated to report quarterly earnings at $1.94 per share on revenue of $618.32 million.
Denbury Resources Inc. (NYSE: DNR) is expected to report quarterly earnings at $0.11 per share on revenue of $312.75 million.
W. P. Carey Inc. (NYSE: WPC) is estimated to report quarterly earnings at $0.53 per share on revenue of $170.81 million.
Triton International Limited (NYSE: TRTN) is expected to report quarterly earnings at $0.92 per share on revenue of $329.70 million.
New Jersey Resources Corporation (NYSE: NJR) is estimated to report quarterly earnings at $0.97 per share on revenue of $749.71 million.
Johnson Outdoors Inc. (NASDAQ: JOUT) is expected to report quarterly earnings at $1.47 per share on revenue of $159.18 million.

 

Companies Reporting After The Bell
BWX Technologies, Inc. (NASDAQ: BWXT) is estimated to post quarterly earnings at $0.61 per share on revenue of $442.30 million.
Weyco Group, Inc. (NASDAQ: WEYS) is expected to post earnings for its first quarter.

Fridays Vital Data: Intel Corporation (INTC), NXP Semiconductors N.V. (NXPI) and Alibaba Group Ho

U.S. stock futures are trading broadly lower this morning. Wall Street was clearly anxious ahead of this morning’s April jobs report. Expectations were for a gain of 188,000 last month, on the heels of March’s surprisingly low 108,000 job adds.

stock market today

Meanwhile, corporate earnings continue to chug along. Alibaba Group Holding Ltd (NYSE:BABA), Celgene Inc. (NASDAQ:CELG) and GoPro Inc. (NASDAQ:GPRO) are front and center on the earnings front.

Heading into the open, futures on the Dow Jones Industrial Average are down 0.33%, S&P 500 futures have shed 0.35% and Nasdaq-100 futures have lost 0.42%.

Turning to the options pits, volume rebounded to normal levels on Thursday. Overall, about 19.9 million calls 18.8 million puts crossed the tape. Despite the jump in call activity, the CBOE single-session equity put/call volume ratio surged to a one-month high of 0.75. The 10-day moving average also moved higher, hitting it’s own one-month high of 0.66.

Options traders were once again paying sharp attention to the semiconductor sector. News broke that “next generation” flaws were again found in Intel Corporation (NASDAQ:INTC) chips, driving heavy volume on INTC stock. Additionally, NXP Semiconductors N.V. (NASDAQ:NXPI) reported weaker-than-expected earnings, drawing attention to options arbitrage spreads in it’s Qualcomm Inc. (NASDAQ:QCOM) merger deal. Finally, Alibaba Group Holdings was call heavy heading into this morning’s quarterly earnings report.

Let’s take a closer look:

Friday’s Vital Options Data: Intel Corporation (INTC), NXP Semiconductors N.V. (NXPI) and Alibaba Group Holding Ltd (BABA)investorplace.com/wp-content/uploads/2018/05/05-04-2018-Top-Ten-Options-300×136.png 300w, investorplace.com/wp-content/uploads/2018/05/05-04-2018-Top-Ten-Options-200×90.png 200w, investorplace.com/wp-content/uploads/2018/05/05-04-2018-Top-Ten-Options-400×181.png 400w, investorplace.com/wp-content/uploads/2018/05/05-04-2018-Top-Ten-Options-116×52.png 116w, investorplace.com/wp-content/uploads/2018/05/05-04-2018-Top-Ten-Options-100×45.png 100w, investorplace.com/wp-content/uploads/2018/05/05-04-2018-Top-Ten-Options-111×50.png 111w,https://investorplace.com/wp-content/uploads/2018/05/05-04-2018-Top-Ten-Options-78×35.png 78w” sizes=”(max-width: 518px) 100vw, 518px” />

Intel Corporation (INTC)

Options traders loaded up on Intel calls yesterday. It was an interesting reaction to news that “next generation” flaws had been found in Intel semiconductors. Specifically, a German computing magazine reported yesterday that researchers found eight new flaws in INTC chips resembling the Meltdown and Spectre bugs revealed earlier this year.

Intel said it was aware of the flaws and was working to patch them. “We believe strongly in the value of coordinated disclosure and will share additional details on any potential issues as we finalize mitigations,” Intel said in a statement.

In a “been there, done that” kind of response, INTC options traders loaded up on call options following the news. Volume came in at 177,000 contracts, with calls gobbling up 83% of the day’s take.

Looking out to May options, the bulls appear to be in firm control of Intel’s short-term sentiment backdrop. Currently, the May put/call open interest ratio comes in at 0.45, with calls more than doubling puts for the series.

But this Intel optimism is not without merit. In fact, INTC stock continues to outperform most of its semiconductor peers, including red-hot names like Advanced Micro Devices, Inc. (NASDAQ:AMD) and Micron Technology Inc. (NASDAQ:MU).

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NXP Semiconductors N.V. (NXPI)

If you are arbitraging Qualcomm’s buyout of NXP Semiconductors, yesterday was painful for you. NXPI stock plunged more than 10% after the company missed Wall Street’s first-quarter earnings target by 12 cents per share. NXPI is now trading about 36% below Qualcomm’s buyout offer of $127.50 per share.

The deal has been slowed by Chinese regulators, whom many argue are dragging their feet due to troubled China/U.S. trade relations.

NXPI options traders were somewhat bullish following the news. Volume rose to 190,000 contracts, nearly tripling NXPI’s daily average. Calls made up about 58% of the day’s take. But while short-term options are optimistic, August options are downright bearish.

Qualcomm and NXP expect a ruling from China by their new deal deadline of July 25. If the August put/call OI ratio of 1.80 is any indication, NXPI options traders believe the deal will fall apart.

Alibaba Group Holding Ltd (BABA)

Alibaba calls were quite popular ahead of this morning’s quarterly report. Volume rose to an impressive 406,000 contracts, with calls eating up 71% of the day’s take. As a result, the May put/call OI ratio fell to 0.67 as traders bet on a post-earnings rally.

Heading into the open, BABA stock is up 1.5% amid a weak start among the major market indexes.

By the numbers, Alibaba posted another blowout quarter. Earnings rose 32% year-over-year to 90 cents per share, topping expectations by 5 cents per share. Sales surged 61% to $9.73 billion, easily beating Wall Street’s view for $9.3 billion.

As of this writing, Joseph Hargett held no positions on any of the aforemen

7 Best Platform Stocks to Buy Now

What are platform stocks? Which are the best platform stocks to buy and how can they make you rich?

Uber is a platform business. So is Airbnb. At its core, a platform businesses connect consumers of products and services with producers of those products and services through a marketplace created and managed by the platform company.

The general idea is to build something so useful that you create a platform that turns into a quasi-monopoly.

CEO Alex Moazed of Platform consultant Applico defines a platform company as follows:

“Successful platforms facilitate exchanges by reducing transaction costs and/or by enabling externalized innovation. With the advent of connected technology, these ecosystems enable platforms to scale in ways that traditional businesses cannot.”

Moazed points out that S&P 500 pure-play platform businesses are valued at an average of 8.9 times revenue, significantly higher than traditional companies at 2-4 times sales.

It’s this reality that makes the Applico Platform Index (API) — a group of 27 platform companies that each have a market cap higher than $2 billion — so successful.

Over the past ten years, the API generated an annualized total return of 15.6%, 510 basis points higher than the tech-heavy NASDAQ, and a testament to the success of platform businesses.

Here are the 7 best platform stocks to buy right now.

7 Platform Stocks to Buy: Ritchie Bros. (RBA) Source: Shutterstock

Before I get into the more obvious platform stocks, I thought I’d go with a couple of index constituents that most investors wouldn’t name when rattling off platform companies.

Ritchie Bros. Auctioneers Inc (NYSE:RBA) is a Canadian company that got its start in the auction business in 1958 and has grown to annual revenues of $611 million by bringing buyers and sellers together to carry out transactions. In 2017, RBA transacted $4.5 billion in business by connecting these buyers and sellers, online and in person.

In the company’s fourth quarter, it saw revenues increase by 22% to $178.8 million as a result of its May 2017 acquisition for $777 million of IronPlanet, a California company that specializes in the sale of used heavy construction equipment.

On March 27, it launched Marketplace-E, a user-friendly digital platform that will make it easier for businesses to dispose of their assets.

Up 7.4% year to date through April 4, Ritchie Bros. platform solutions should continue to grow the business for years to come.

7 Platform Stocks to Buy: American Express (AXP) American Express stock Source: Shutterstock

American Express Company (NYSE:AXP), along with Apple Inc. (NASDAQ:AAPL), were the APIs first two platform companies back in 1984, the date of the index’s inception.

American Express qualifies as a platform company because it operates a closed-loop network where it acts as both card issuer and bank cutting out the middleman.

Additionally, AXP launched Serve in 2011, a platform that enabled its customers to make person-to-person payments using their phone. In 2017, American Express announced that it was selling the U.S. distribution rights and technology of its prepaid reloadable and gift card products — including Serve —  to InComm Holdings.

The platform technology was useful to AXP’s prepaid business. But it turns out the low-end customer didn’t generate enough revenue for it to keep distributing the Serve prepaid cards.

2017 was a transformative year for American Express for two reasons.

First, Ken Chenault retired as CEO of the company in October after 16 years in the job, passing the reins to Stephen Squeri. Secondly, it grew its business at a nice pace over the past year. Highlights include growing the total number of cards in force by 2.9 million and increasing the number of cardmember loans by 12% while adding 1.5 million new merchant locations.

All of that added up to total revenues of $33.5 billion and $7.4 billion in pretax income. Both numbers decent, if not spectacular results. As it continues to work on generating more revenue from each cardholder, I’d expect both the top- and bottom-line to improve in 2018 and beyond.

7 Platform Stocks to Buy: Apple (AAPL) How Apple Inc. (AAPL) Stock Could Benefit by Being More Like IBM Source: Shutterstock

Apple is the other original platform stock in the index. It operates a number of different platforms that connect the Apple user to the iOS ecosystem. If you own an iPhone, you know what I’m talking about. Whether it be the App Store, iTunes, Apple Music, iCloud or any of its other services, Apple products are tied into all of these.

I’ve recently considered buying a laptop. Most likely, I’ll buy an Apple product because of the iOS platform. It might be more expensive, but already owning an iPhone and iPad mini, I’m committed to it.

To get me off the Apple platforms the company either has to mess up the ecosystem and products colossally, or the competition delivers something so unbelievably useful I want to switch.

Personally, I don’t think either of those is going to happen. I’m not saying the competition is bad; just that they’re not lights out great. Tim Cook’s job is to deliver new products that are solid, if not spectacular, to feed the platforms, which continue to grow by double digits in terms of revenue.

People like myself will always be okay with just good, and that’s why Apple has the highest market cap in the world. Of all the platform stocks to buy, Apple is the one I’d recommend to buy-and-hold investors.

7 Platform Stocks to Buy: Microsoft (MSFT) Microsoft Corporation MSFT stock Source: Mike Mozart via Flickr (Modified)

You can’t include Apple in a discussion about platform stocks without also talking about Microsoft Corporation (NASDAQ:MSFT). When it comes to platforms, they’re tied at the hip.

With Microsoft’s cloud and AI initiatives taking center stage at the company, the original Windows platform is looking like a tiny fraction of its overall business. It’s still an essential component through Office 365, but less so than a decade or even five years ago.

Microsoft just announced that it’s spending $5 billion over the next four years on the Internet of Things (IoT) devices. The key to any good platform is the level of connectedness it provides its customers and Microsoft knows it.

In an April 4 blog post, Microsoft Corporate Vice President Julia White  wrote .

“Microsoft’s IoT offerings today include what businesses need to get started, ranging from operating systems for devices, cloud services to control and secure them, advanced analytics to gain insights, and business applications to enable intelligent action. We’ve seen great traction with customers and partners who continue to come up with new ideas and execute them on our platform.”

CEO Satya Nadella might be overpaid, but he sure is making a lot of smart moves at the house Bill built.

7 Platform Stocks to Buy: Redfin (RDFN) Redfin (RDFN) Source: Shutterstock

In November 2013, I recommended Zillow Group Inc (NASDAQ:ZG), suggesting “if you want to make a lot of money in 3 to 5 years, buying Zillow stock is a smart move.”

Over the past five years, its stock price has doubled, a good, if not spectacular return. Now considered relatively pricey, I thought I’d turn my attention to another real-estate stock on the index — Redfin Corp (NASDAQ:RDFN).

The company’s business model is simple.

It offers real estate agents a technology-enabled, vertically integrated real estate brokerage. It provides buyers and sellers a better experience for less. According to Redfin’s latest March presentation, if you sell a $500,000 home through them and then buy a $500,000 house through them, you’ll save $12,000 assuming the traditional listing-agent and buying agent fees are both 3%.

Houses sell faster through Redfin and for a better price. It’s technology disruption to the max.

“We expect the competitively compelling value prop and simplicity of the ‘1 percent’ product to resonate with consumers this year and potentially accelerate RDFN share gains,” D.A. Davidson analyst Tom White recently told clients in a note.

A good business always makes or saves people money. Redfin does both making it a winner in my books.

7 Platform Stocks to Buy: Amazon (AMZN) Amazon Stock Is a Raging Bull You Don’t Want to Mess With! Source: Shutterstock

Despite President Trump’s assertion that Amazon.com, Inc. (NASDAQ:AMZN) is scamming the Post Office out of billions and cheating the Treasury Department out of significant taxes, it’s hard not to appreciate the platform Jeff Bezos has built since its founding in 1994.

People think Jeff Bezos wants to own online retail. And Amazon certainly has a big chunk of the market — the company generated 44% of the U.S. e-commerce sales in 2017. But that’s just a small part of a bigger picture.

Amazon doesn’t want to own online retail; it wants to own your home — figuratively, not literally.

I wrote March 2:

“Costco’s business model allows it to survive on razor-thin margins because of its annual membership. Through Prime, Amazon could do the same. Instead of offering just speakers, video streaming, doorbell cameras and all the other things it sells online, why not provide everything a homeowner (and renter) could need to keep the household functioning.

“Amazon could provide insurance, mortgages, wealth management, travel, legal advice, healthcare insurance (it’s on that), actual healthcare, the list goes on.”

Amazon’s biggest platform is Prime. That single membership will take the company much farther than merely focusing on e-commerce. Soon, Prime members are said to be getting a 10% discount when they shop at Whole Foods.

It’s not about online sales. It’s about total sales to the homeowner or renter. That’s exponentially larger.

7 Platform Stocks to Buy: Alibaba (BABA) What to Expect From BABA Stock Earnings Source: Shutterstock

 Amazon is all about the home, but Alibaba Group Holding Ltd (NYSE:BABA) goes at this from a slightly different angle. It wants to provide all the platforms and big data necessary for small businesses to compete and thrive — both in its home country of China and around the world.

I neglected to mention AWS in the section about Amazon, the highly profitable piece of its business that helps businesses compete more effectively. I did so, in part, because I believe AWS got its start to provide the infrastructure necessary for AMZN to be a big player in e-commerce retail and moved beyond its walls when it realized it had more capacity at its data centers than it needed in-house.

Suffice to say, Amazon hasn’t forgotten about its business clients, but I digress.

Last May, I called Ma the next Jeff Bezos. Like Bezos, he wants to reinvent retail by owning the consumer, but he knows he can’t do that without successful small businesses.  So, he’s building the same infrastructure that Amazon has such as the cloud, AI, data analytics, whatever it takes to understand what the consumer wants and needs and get it to them.

Eventually, the two companies could be only dominant global players in the business-to-consumer space. Amazon’s well ahead of Alibaba, but Jack Ma’s closing the gap. The next ten years should be exciting.

As of this writing Will Ashworth did not hold a position in any of the aforementioned securities.

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