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Fire looks hotter than expected
Amazon (AMZN US) has just released its much anticipated tablet, the Kindle
Fire, plus some new versions of their popular reader.
Ben Schachter believes the new products, driven by aggressive pricing and
solid execution, will almost certainly be successful with consumers. While not an
iPad killer, at US$199 Ben thinks Fire will sell out fast. Ben also thinks the
Amazon Prime trial offer and the positive impact of tablets on Amazon’s physical
and digital sales more generally is still being underestimated by the market.
The bottom line is that the tablet will drive more physical goods revenue per
user, significantly improve Amazon’s digital media revenue, as well as add
revenue from the sale of the devices themselves. The flip side is that near-term
margins will likely be pressured meaningfully from content rights, technology
investment, shipping and marketing spend. That said, if Amazon can create an
ecosystem like Apple/iTunes, the potential long term rewards for shareholders
would be significant. While margins and the macro environment give reason to
be cautious near term, Ben maintains his Outperform. >> Read Report
Onto the hot topic of European banks; Thomas Stoegner and the team have
outlined in 120 pages why HSBC (HSBA LN) is their top sector pick. In short,
they favour HSBC because it has a strong balance sheet in an uncertain
environment, one of the lowest bank funding costs in the world and a structurally
superior growth outlook to peers. Over the next 12 months it has a forecast TSR
of 37%, including an attractive dividend yield of 5.5%. >> Read Report
US$199 Fire tablet expected to boost Amazon’s digital media revenue
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Fire looks hotter than expected
Amazon (AMZN US) has just released its much anticipated tablet, the Kindle
Fire, plus some new versions of their popular reader.
Ben Schachter believes the new products, driven by aggressive pricing and
solid execution, will almost certainly be successful with consumers. While not an
iPad killer, at US$199 Ben thinks Fire will sell out fast. Ben also thinks the
Amazon Prime trial offer and the positive impact of tablets on Amazon’s physical
and digital sales more generally is still being underestimated by the market.
The bottom line is that the tablet will drive more physical goods revenue per
user, significantly improve Amazon’s digital media revenue, as well as add
revenue from the sale of the devices themselves. The flip side is that near-term
margins will likely be pressured meaningfully from content rights, technology
investment, shipping and marketing spend. That said, if Amazon can create an
ecosystem like Apple/iTunes, the potential long term rewards for shareholders
would be significant. While margins and the macro environment give reason to
be cautious near term, Ben maintains his Outperform. >> Read Report
Onto the hot topic of European banks; Thomas Stoegner and the team have
outlined in 120 pages why HSBC (HSBA LN) is their top sector pick. In short,
they favour HSBC because it has a strong balance sheet in an uncertain
environment, one of the lowest bank funding costs in the world and a structurally
superior growth outlook to peers. Over the next 12 months it has a forecast TSR
of 37%, including an attractive dividend yield of 5.5%. >> Read Report
US$199 Fire tablet expected to boost Amazon’s digital media revenue
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