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Why Bill Miller Is Optimistic about Amazon


Feb. 8 2017, Updated 2:06 p.m. ET

Bill Miller on Amazon

Bill Miller discussed Amazon (AMZN) in a recent interview with CNBC. Amazon (AMZN) is one of Bill Miller’s big picks in the global retail space (XRT). Earlier, at the Delivering Alpha Conference, he said that the stock could double in 3 years.

Bill Miller is confident in both of its business segments: its retail segment and Amazon Web Services. According to Bill Miller, Google (GOOGL) and Facebook (FB) app businesses have a market size of $600 billion. However, Amazon Web Services and its retail business target addressable markets of over a trillion dollars. According to Miller, Amazon’s addressable market is much larger than Facebook (FB) and Google’s (GOOGL) addressable markets.

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Amazon’s business model

Bill Miller is optimistic about Amazon’s business model. In its business model, customer requirements are identified individually. The company focuses on tracking more customers, and the business is mainly driven by Amazon Web Services.

Amazon versus Alibaba

Bill Miller is quite confident about Amazon’s logistic system compared to Alibaba’s (BABA). Amazon’s timely delivery system gives it a competitive edge over Alibaba.

Performance of Amazon

Amazon rallied nearly 61.3% in the last one year ending on February 3, 2017. The broad market, the S&P 500 Index (SPY) (SPX), rallied nearly 22.1% over the same time period.

On February 2, 2017, Amazon reported its 4Q16 earnings results. In 4Q16, its revenue rose 22.3% compared to 4Q15 and 33.7% compared to 3Q16. The stock rose 0.9% on the same day. Its adjusted EPS was $1.54 compared to analyst estimates of $1.35 in 4Q16.

In the next part of this series, we’ll analyze Bill Miller’s view on Apple.



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