They call CNBC, Circus NBC, but many of the analysts on Wall Street are really part of that circus too. Most times when I feel the info being communicated is really bad, I just laugh, but then get anger because the uninformed retail investor is going to take this information and run with it.
The latest article I came across was talking about some Nomura analysts taking about the inverted yield curve leading to a slowdown, but how some tech and digital media companies can outperform during a recession. Here’s what they said about Amazon.
The analysts said e-commerce stocks were the “best to own in such an environment,” singling out Amazon and pet retailer Chewy, the latter because demand for pet products has shown resilience during recessions. While e-commerce sales growth slowed during the great financial crisis, the digital companies gained market share from traditional retailers.
“Amazon is also well-positioned as a general-purpose retailer,” the analysts wrote, while noting Nomura doesn’t officially cover the stock.
“We would expect this trend to continue in a future downturn, continuing the decline of legacy brick-and-mortar retailers that have suffered in the ‘retail apocalypse’ in favor of more nimble and online-focused marketplaces. We expect larger e-commerce platforms and niche retailers whose end markets are less discretionary to outperform,” the analysts said.
I’m here to tell you in a downturn, Amazon is going to decline significantly as well. 41% of a stock’s movement is based on the sector it belongs to and 39% of stock’s movement is based on the index. So only 20% of a stock’s movement is based on earnings, cashflow, P/E, etc. But don't take my word for it, just look at the "V" shape recovery in late 2018 and early 2019.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.