Saturday, October 27, 2012

AMZN: Why does Apple have a forward P/E of 10 while...

2:41 PM Why does Apple have a forward P/E of 10 while Amazon (AMZN) has a forward P/E of 100? The reason, as Barron's points out, is "the perception of absolute control at Amazon." Amazon is a company that could generate billions more in annual profits if it chose not to invest at a breakneck pace on new warehouses, streaming rights, subsidized hardware, and much else. Thus, Amazon bulls are content to focus on its share gains and healthy gross margin. But if Jeff Bezos plans to take his foot off the accelerator, he isn't tipping his hand. (Read the comments on this)

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