{"id":111931,"date":"2017-08-30T10:13:41","date_gmt":"2017-08-30T14:13:41","guid":{"rendered":"http:\/\/countingpips.com\/?p=111931"},"modified":"2017-08-30T07:14:18","modified_gmt":"2017-08-30T11:14:18","slug":"the-hunt-for-survivors-in-an-amazon-dominated-world","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/08\/the-hunt-for-survivors-in-an-amazon-dominated-world\/","title":{"rendered":"The Hunt for Survivors in an Amazon-Dominated World"},"content":{"rendered":"
August 30, 2017<\/div>
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By WallStreetDaily.com<\/u><\/a> \"The<\/p>\n

\"LouisIt\u2019s been well-documented<\/strong><\/a> here\u2026<\/p>\n

Amazon (AMZN) is a serial killer, and its prey is retailers \u2014 ones who never thought of building a moat.<\/p>\n

Now, I\u2019ll be the first to concede\u2026<\/p>\n

In the old paradigm, retailers didn\u2019t need to think much about moats:<\/p>\n

\n

The term \u201ceconomic moat,\u201d coined and popularized by Warren Buffett, refers to a business\u2019 ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share from competing firms. \u2014 Investopedia<\/em><\/p>\n<\/blockquote>\n

As long as your store enjoyed 1) a courteous staff, 2) competitive pricing and 3) a good location \u2014 all was well.<\/p>

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But today? Those three metrics \u2014 standing alone \u2014 would put you out of business in six months. If not sooner.<\/p>\n

And on the heels of Amazon\u2019s acquisition of Whole Foods, which closed this week, investors are convinced that every<\/em> retailer is in Amazon\u2019s cross hairs.<\/p>\n

Not so fast!<\/p>\n

Bespoke Investment Group recently compiled an \u201cAmazon Survivors\u201d Index, which includes retailers they believe can survive Amazon\u2019s onslaught.<\/p>\n

After digging into the data, we found some timely and actionable surprises that warrant your immediate attention.<\/p>\n

Look for downtrodden \u2014 but not out \u2014 retailers for triple-digit gains.<\/h2>\n

\"JonathanEverybody loves a comeback\u2026 especially on Wall Street. And they still exist in the beleaguered retail industry.<\/p>\n

Look no further than the best-performing stock in Bespoke\u2019s \u201cAmazon Survivors\u201d Index \u2014 Lumber Liquidators Holdings Inc. (LL).<\/p>\n

You\u2019ll recall the nation\u2019s largest hardwood flooring company was rocked in 2015 by a scandal involving Chinese-produced flooring that it sold containing unsafe levels of formaldehyde.<\/p>\n

The company shed more than 80% of its market value in just six months.<\/p>\n

But boasting a one-year gain of 118%, today it\u2019s the best<\/em>-performing stock in Bespoke\u2019s \u201cAmazon Survivors\u201d Index.<\/p>\n

It\u2019s also outperformed the S&P 500 by tenfold over the same period.<\/p>\n

Yes, you read that right.<\/p>\n

Paying out tens of millions in legal costs, Lumber Liquidators has finally put the majority of its legal woes resulting from the scandal behind it.<\/p>\n

And the firm crushed analyst estimates with its fiscal second-quarter results \u2014 beating the Street by 2% on the top line, and more than 300% on the bottom line.<\/p>\n

This year, sales are expected to grow nearly twice the rate of the industry.<\/p>\n

Better still, the company has a debt-to-equity ratio of just 0.3. That\u2019s almost a tenth of the industry average (2.9).<\/p>\n

Two takeaways:<\/p>\n

If you\u2019re looking for an Amazon-proof momentum play on retail \u2014 right now \u2014 look no further than Lumber Liquidators.<\/p>\n

If you\u2019re looking to outperform the S&P 500 by tenfold in the future, scouring the \u201cAmazon Survivors\u201d Index for down but not out companies wouldn\u2019t be a bad place to start.<\/p>\n

Think outside the box to unlock Amazon-proof profits.<\/em><\/h2>\n

Look around you.<\/p>\n

If you\u2019re at home, odds are that anything you see could be bought on Amazon.<\/p>\n

For cheaper than most other places \u2013 and with free two-day delivery.<\/p>\n

That\u2019s the secret right there: If it can fit in a box on a truck, it is now part of Amazon\u2019s potential market.
\nSo find a market that\u2019s out Amazon\u2019s reach.<\/p>\n

Enter our second surprise on the Amazon Survivors list, Camping World Holdings Inc. (CWH).<\/p>\n

RV owners and camping enthusiasts are looking to make big purchases that they want to see and touch well before they purchase, and Camping World fits the bill.<\/p>\n

Amazon simply can\u2019t meet the level of customer service necessary to handle such large-item purchases.<\/p>\n

And they certainly don\u2019t have trucks big enough in which to fit RVs.<\/p>\n

The fundamentals of the company speak to this, loud and clear\u2026<\/p>\n

In the last year, earnings have grown at a rate of 32%.<\/p>\n

And on a forward 12-month basis, EPS are projected to rise by 35%. That\u2019s more than ten times the industry\u2019s forecasted growth rate (3.5%) over the same period.<\/p>\n

Camping World is a great example of a successful retail business model, doing something Amazon just flat out can\u2019t do.<\/p>\n

Forget inclusion\u2026 absences from the list are equally telling \u2014 and make for compelling trades.<\/h2>\n

\"MartinA few weeks ago, we wrote:<\/p>\n

\u201cWhen you consider that almost half of U.S. households are now Amazon Prime subscribers, department stores like Macy\u2019s and J.C. Penney are sleepwalking into their graves.\u201d<\/p>\n

To no one\u2019s surprise\u2026<\/p>\n

Macy\u2019s and J.C. Penney are not <\/em>listed on Bespoke\u2019s \u201cAmazon Survivors\u201d Index.<\/p>\n

That means if you\u2019re not opposed to selling stocks short, such absences represent timely trades, too.<\/p>\n

After all, there\u2019s not much that can stand in the way of Amazon\u2019s ability to wipe out brick-and-mortar retailers.<\/p>\n

Sure, President Trump\u2019s support for an internet sales tax might level the playing field taxwise between internet and physical retailers. But it will only postpone the inevitable death. Tax savings are not <\/em>the reason everyone shops on Amazon.<\/p>\n

It\u2019s also possible that Amazon\u2019s practice of \u201ccommingling\u201d supplies from different suppliers, which allows fake and low-quality goods to enter its distribution chain, could slow down its dominance. But again, any such delays will only be temporary.<\/p>\n

Bottom line: Don\u2019t bet against Amazon. Bet on its continued dominance and invest accordingly.<\/h2>\n

\"LouisAny thoughts of finding and investing in a company that\u2019s going to disrupt and dethrone Amazon is pure foolishness.<\/p>\n

But that doesn\u2019t mean we should simply buy Amazon shares and avoid every other retail stock in perpetuity.<\/p>\n

As Bespoke\u2019s \u201cAmazon Survivors\u201d Index reveals, ample opportunity still exists in the sector. We just have to pick our investments wisely by buying companies with well-defined moats and\/or betting against ones without any.<\/p>\n

Ahead of the tape,<\/p>\n

Louis Basenese
\nChief Investment Strategist, Wall Street Daily<\/i><\/p>\n

The post The Hunt for Survivors in an Amazon-Dominated World<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com It\u2019s been well-documented here\u2026 Amazon (AMZN) is a serial killer, and its prey is retailers \u2014 ones who never thought of building a moat. Now, I\u2019ll be the first to concede\u2026 In the old paradigm, retailers didn\u2019t need to think much about moats: The term \u201ceconomic moat,\u201d coined and popularized by Warren Buffett, […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-111931","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/111931","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=111931"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/111931\/revisions"}],"predecessor-version":[{"id":111943,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/111931\/revisions\/111943"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=111931"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=111931"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=111931"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}