Investing in Amazon Inc.: Is it the right time

Category: Investment 12 0

The economy today is bigger than ever before and companies which were once young and budding start-ups are now worth more than a trillion dollars. Among these companies that are taking the world by storm, there are very few with as much potential for change or impact as Amazon Inc. a company which deals in scalability rather than products or services.

Yes, as bizarre as that might sound Earnings Amazon’s main business is dealing in voluminous quantities of a product rather than dealing with sales of product or services entirely. This is what separates it from other e-commerce companies and makes them the outright leaders in the market. Very recently it became only the second company in the world to cross the 1 trillion dollar mark, in terms of market capitalization. These numbers show tremendous promise for a company whose entire market is internet based. With an impending rise in the number of mobile device users and the impact of the internet yet to fully reach developing countries, there are whole new bases for Amazon to cover.

If you happen to be an investor or a stockbroker, now is the best time to invest in the company. Let us take a look at what the earnings figures are, and how you can approach it best.

Amazon earnings calendar and what it looks like:

At the moment the projected earnings date for Amazon is expected to be around 25th October and if you have been planning to either invest or divest from this company, you should strategize now itself as the predicted numbers will kick in, effective immediately. There is a number called the “% predicted moves after earnings announcement” or the PMAEA, which is a carefully analysed number expected to show the movement of the stock in either direction.

This number takes into account the performance of the company in the market, historical announcements and much more. The number is derived by the careful calculations of many expert theoreticians and analysts. This year the PMAEA for Amazon is 6% despite performing poorly in the last few days.  The number helps you keep a margin and put in place a strategy to buy or sell the stock come earnings date. The number for the PMAEA after 7 days sits at around 7 % and is expected to stay the same. All of these changes are short-term and is a risky option, as it relies on the earnings announcement and high volatility of the stocks.

The 6% PMAEA means that you can keep your strike price at around 12%, this number is a big margin and the stocks are unlikely to reach this in either direction, in the off chance that it actually does, you should definitely buy the stocks. There are no guarantees for these predicted movements as the stock markets itself are very hard to predict. The estimated numbers are as close as anyone is ever going to get, so you should plan your strategy in and around this date. Investing in Amazon seems like the right ploy for any investor thinking about the future.

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