Amazon falls 10% in a single day

The online retailer missed on earnings estimates, and the stock takes a hit. Is this a temporary setback?

By Motley Fool Investor Beat Jan 31, 2014 6:02PM
Amazon (AMZN) investors hit the panic button Friday, with the stock selling off to the tune of nearly 10 percent after the company reported earnings that missed analysts' consensus expectations by a pretty wide margin.

However, earnings per share isn't the only number investors need to look to here. In this video, host Mark Reeth talks with Motley Fool analyst Brendan Mathews about the key numbers he looks at in tracking Amazon's performance.
Brendan looks at the company's sales growth, which was up 20 percent year over year, and he also looks at Amazon's operating cash flow, which was up 10 percent.

Including these numbers in an analysis of the company paints a broader picture of Amazon's quarter than just looking at earnings per share, and Brendan sees it as having been a good quarter overall.Amazon.com logo © Spencer Platt/Getty Images

On the business side of things, Brendan sees a number of exciting initiatives that Amazon is investing in today. He sees huge growth in Amazon Prime membership numbers and upgrades to the company's Kindle tablet and its Amazon Prime streaming video content library, and says that as long as Jeff Bezos is still at the helm, the company has an enormous amount of growth ahead. He doesn't see a single quarter's earnings miss as a cause for concern, and is definitely a buyer on Friday's pullback.

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Tags: AMZN
4Comments
Feb 1, 2014 3:21AM
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Take it from somebody who wishes he would have taken a smart, trusted friend's advice back in March of 2000 to sell all his tech stocks, take the $ and run, but didn't.  This is how it begins: " Oh, don't panic, it's down only 5%.  Then:O h, it's only down 10% now, but that's HEALTHY for the market."  Sorry, but losing your **** is NEVER healthy!  Before you know it, trust me, you're so far down it's too late.  All you people that are invested in the stock market now (in non-gold related shares) have been given a gift by this slow, albeit seductive, slide instead of a crash.  You have the chance to get out now while you're still pretty intact.  Don't be greedy like I was.  You've had a great run- take your money and enjoy your winnings like I didn't.  If I can just help one person get out whole, I'll be happy.  I've regretted my greed every day for the last 14 years.
Feb 3, 2014 9:58AM
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Well deserved. Can't loose money for ever.
Feb 2, 2014 12:03PM
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It is very difficult to turn your back on "possible" more appreciation...?

It is even more difficult to try and time the Markets...

Greed can be and always will be a detriment..


I think Buffet related to the "fear and greed" objectives like others have.

Possibly stop losses or trailing stops could help alleviate some of the problems..

The question remains when do you apply them in trending bull markets, that have hard corrections.

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