Seven Strategies Betting on This Online Giant

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

This week’s Alpha Algorithm has identified yet another U.S. retailer as a favorite among Wall Street’s smart money: online shopping giant Amazon.com (AMZN).

Founded in 1994 and headquartered in Seattle, Washington, Amazon.com, Inc. sells consumer products in North America and internationally. Amazon also manufactures and sells electronic devices, including Kindle e-readers, Fire tablets, Fire TVs, Fire phones and Echo, an Internet-connected speaker.

AMZN

Amazon.com (AMZN) (blue) vs S&P 500 (red) over 3 months

Seven Top Investment Strategies Betting on Amazon.com (AMZN)

  1. Hedge Fund Alpha

Based on publicly available disclosures, successful hedge fund managers are investing in the stock.

  1. Hedge Fund Gurus

Apple is one of the top U.S.-listed equity positions reported on Form 13F by select hedge funds with concentrated top holdings.

  1. Large Cap Growth

The stock is among the top 50 large-capitalization U.S. growth stocks generated through a rigorous 10-factor fundamental screening process.

  1. Large-Cap Growth and Value

Using a proprietary ranking based on separate models for growth and value, this is a large-cap stock that is part of an index that has historically outperformed its market-cap weighted benchmark.

  1. Momentum Factor

The stock also is one of the top 120 large- and mid-cap U.S. stocks exhibiting relatively higher price momentum, as measured by a specific factor which has historically driven a significant part of companies’ risk and return.

  1. Morningstar’s Moat

This stock is included in a strategy that tracks an equal-weighted index of 20 companies that Morningstar determines to have the highest fair value among firms with a sustainable competitive advantage or “moat.”

  1. Small-Cap/Value Tilt

Selected using a multi-factor modeling approach, the stock is a smaller-cap or value stock designed to enhance portfolio risk/return characteristics.

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Recommendation

Buy Amazon.com (AMZN) at market today.

Place your initial stop at $640.00.

Options

In the current volatile market environment, I am holding off on recommending any options in this position for now.

Portfolio Update

For all of the fallout after the United Kingdom’s Brexit vote, your Alpha Algorithm portfolio held up remarkably well compared to the broader market.

You were stopped out of Aflac Incorporated (AFL) last Friday at $68.68 when it opened below its raised stop price of $69.85. You gained 8.85% on this position.

You also were stopped out of another large financial stock, American International Group, Inc. (AIG) at a loss.

But considering European bank stocks tumbled as much as 30% after the vote last Friday, this was a relatively benign result.

As an example, last week’s Alpha Algorithm recommendation, Sherwin-Williams (SHW), ended its first week in the portfolio only a hairsbreadth down.

No fewer than four of your Alpha Algorithm positions — AT&T, Inc. (T), Johnson & Johnson (JNJ), Walmart Stores, Inc. (WMT) and Altria Group Inc. (MO) — hit six-month highs this past week.

Both AT&T, Inc. (T) and Johnson & Johnson (JNJ) are within striking distance of double-digit percentage gains, despite the market turmoil.

Bigger and boring is better so far in 2016.

Sincerely,

Nicholas Vardy

Nicholas A. Vardy

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With the news of the United Kingdom’s vote to exit the European Union (EU) last Thursday, it was a tough week for global stock markets across the board. The Dow Jones fell 2.36%, the S&P 500 tumbled 2.53% and the NASDAQ fell 3.14%. The MCSI Emerging Markets Index fared surprisingly well by falling only 2.75%. A single stock in your Alpha Investor Letter portfolio, BYD Company, Ltd. (BYDDF), ended the week in the plus column, rising 0.51%. Your newest recommendati

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