WEBVTT - SRG's Flickinger on Amazon: Harvesting Capex (Correct)(Audio)

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<v Speaker 1>This is taking stock with PIM Fox and Kathleen Hayes

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<v Speaker 1>on Bloomberg Radio. Amazon it beat on earnings per share

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<v Speaker 1>buck seventy eight versus an estimated dollar twelve cents to share.

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<v Speaker 1>It beat on second quarter net sales. The estimate was

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<v Speaker 1>twenty nine a half billion that came at thirty point four.

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<v Speaker 1>But it sees its third quarter operating income at fifty

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<v Speaker 1>million to six hundred fifty million versus an estimated eight

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<v Speaker 1>hundred fifteen million, So the share price is now down.

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<v Speaker 1>Bert Flickinger joins us now managing director at Strategic Resource

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<v Speaker 1>Group here in New York City, also in our New

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<v Speaker 1>York studio. To look at the numbers, Bird, what do

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<v Speaker 1>you think so far? Amazon's numbers are phenomenal, Kathleen and

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<v Speaker 1>PIM revenue increased thirty one percent last last year to

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<v Speaker 1>date revenue increase work. They're dominating the developed world quicker

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<v Speaker 1>than Genghis Khan or anyone from Series and Robot to

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<v Speaker 1>Sam Wall never ever did uh the The earnings per

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<v Speaker 1>share are terrific. The one concerned people have in the

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<v Speaker 1>aftermarket is Amazon's being conservative on guidance. But Amazon is

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<v Speaker 1>always conservative on future guidance. Bert Flickinger, Who's Amazon gonna

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<v Speaker 1>put out of business? Next? Amazon's not gonna put Walmart

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<v Speaker 1>dot Com out of business, but neither Walmart dot Com

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<v Speaker 1>nor anyone else can catch up. So, PAM, you're looking

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<v Speaker 1>at everyone from dollar stores to discount stores, to grocery

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<v Speaker 1>stores to fashion, specialty and accessory stores going out of

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<v Speaker 1>business worldwide. Everybody's looking to save more money with price discovery. Uh,

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<v Speaker 1>save more for Amazon. Uh. Students, seniors, working class are

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<v Speaker 1>getting crushed economically. Amazon's a solution to raise everyone's standard

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<v Speaker 1>of living. Wow, that's a very bold statement. That's a

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<v Speaker 1>solution that brace everyone's standard of living. You have to

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<v Speaker 1>whether it's the students I teach at Cornell University who

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<v Speaker 1>come from around the world, or it's it's it's people

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<v Speaker 1>in all walks of life that we're talking to, whether

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<v Speaker 1>it's in the Middle East, Europe, Asia, or the America's

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<v Speaker 1>um working people's students, seniors need a bargain better on

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<v Speaker 1>get those in in brick and mortar. I see bargains

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<v Speaker 1>all over the place where they're they're bargains all over,

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<v Speaker 1>But there's Amazon provides the depth and range of assortment, free,

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<v Speaker 1>free delivery, great styles and colors matching, and in many

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<v Speaker 1>states and provinces no sales tax. So with with Amazon,

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<v Speaker 1>it's a great solution. To your point, people still go

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<v Speaker 1>to go to stores for UH style and and fit.

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<v Speaker 1>But one of the things that's really really hurting all

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<v Speaker 1>the malls is the mediocre creative that's coming out of

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<v Speaker 1>the Hollywood studios. So customer counts are down in the

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<v Speaker 1>malls into pimps present point. With more and more bricks

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<v Speaker 1>based retailers going out of business, that's killing the customer

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<v Speaker 1>counts even for the successful retailers. So everybody in shopping

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<v Speaker 1>malls and centers are suffering. In Amazon's capitalizing, well, just

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<v Speaker 1>to give you this comparison, right, if you take a

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<v Speaker 1>look at the sales of Amazon there on a run

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<v Speaker 1>rate to do about a hundred and twenty billion a year, right,

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<v Speaker 1>Walmart run rate about four hundred and eighty right billion.

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<v Speaker 1>If you take a look at the market cap though,

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<v Speaker 1>market cap of Walmart two hundred and twenty eight billion

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<v Speaker 1>dollars market cap of Amazon three hundred and fifty five

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<v Speaker 1>billion dollars. There win in the war as far as

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<v Speaker 1>market capitalization, what people think the company is worth. Think

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<v Speaker 1>what it's worth and look at well managed companies like

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<v Speaker 1>Macy's Bloomingdale's to your point of growth PIM Macy's Bloomingdale's

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<v Speaker 1>is about twenty five billion combined. That's what Amazon is

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<v Speaker 1>adding in new sales every year. Chain the size of

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<v Speaker 1>Macy's and Bloomingdale's. And Macy's and Bloomingdale's is dominant in

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<v Speaker 1>department stores worldwide by far the biggest. Best. Do you

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<v Speaker 1>buy Amazon stock now? I would, Kathleen. Amazon's blown through

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<v Speaker 1>both both my annual estimates, the less a few years

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<v Speaker 1>two years ago at this time I predicted from five

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<v Speaker 1>fifty to six fifty. When it was at six hundred,

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<v Speaker 1>I predicted seven fifty at this point, see it being

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<v Speaker 1>unstoppable both competitively and economically to at least eight hundred.

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<v Speaker 1>Full disclosure, own own Amazon and will continue to own

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<v Speaker 1>Amazon's long term holding. I just mentioned that the shares

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<v Speaker 1>of Amazon are higher right now by nearly five percent

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<v Speaker 1>in after hours trading. But one more thing on on Amazon,

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<v Speaker 1>the web services division. I know you're not a tech geek,

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<v Speaker 1>at least you don't play one on radio, war on television,

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<v Speaker 1>but Amazon Web Services. We were just talking with Roger

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<v Speaker 1>mcmeee the deal nine point three billion dollars Oracle buying

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<v Speaker 1>net Suite. This is a big and growing business for

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<v Speaker 1>Amazon that other retailers don't seem to have. Pammy right

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<v Speaker 1>A w S or Amazon Web Services is a phenomenal business.

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<v Speaker 1>It's nine percent of Amazon currently, the segment of the

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<v Speaker 1>markets growing by over three hundred billion dollars per year,

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<v Speaker 1>and Amazon's leader fire ahead of Google, fire ahead of IBM,

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<v Speaker 1>Oracle everyone else. So in terms of the catch up factor,

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<v Speaker 1>does anybody catch up with Amazon? Now? Is there any

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<v Speaker 1>hope Kathleen, Amazon's unstoppable past president in future because Jeff

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<v Speaker 1>Bezos had the great strategic vision to invest maximum capex

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<v Speaker 1>for decades. Uh, It's something the Roman Empire did its

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<v Speaker 1>first two hundred years, and there been long term Roman

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<v Speaker 1>empires of retailing, but no one's committed the capex, whether

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<v Speaker 1>it's the Walden family at Walmart nor anyone else. So, Uh,

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<v Speaker 1>Amazon is going to continue to grow, harvesting it's its capex,

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<v Speaker 1>and its competitors don't have the balance sheets to beat Amazon,

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<v Speaker 1>Thank you very much. Bert Flickinger, he is managing director

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<v Speaker 1>of Strategic Resource Group. Shares of Amazon up nearly five

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<v Speaker 1>percent in after hours trading, after reporting second quarter earnings

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<v Speaker 1>and revenue that exceeded estimates. This is Bloomberg