Back into a Leading 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 returns to a previous recommendation, online shopping giant (AMZN), in which you have already booked more than a 15% gain.

Founded in 1994 and headquartered in Seattle, Washington, 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 (AMZN) (blue) vs. the S&P 500 (green) year to date. 

10 Top Investment Strategies Betting on (AMZN)

1. Hedge Fund Alpha

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

2. Hedge-Fund Gurus

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

3. 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.

4. 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.

5. Large-Cap Alpha Growth

Amazon has been chosen as part of an alpha-seeking index that selects and weights growth stocks from the S&P 500 Growth Index. The proprietary methodology uses price appreciation — among more traditional factors — and weights the constituents based on their respective growth scores.

6. 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.

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7. Momentum Model

The stock is among the top approximately 100 U.S.-listed companies to demonstrate powerful strength characteristics relative to the 3,000 largest U.S.-listed companies.

8.Goldman Sachs’ Active Beta

The stock is selected according to four factors — value, quality, momentum and low volatility. These, in turn, are based on criteria including book value, sales and cash flow scaled by share price, profit/assets or return on equity (ROE), risk-adjusted returns and daily standard deviation of returns.

9. 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.”

10. 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.


Buy (AMZN) at market today. Place your initial stop at $675.00.


If you want to play the options, I recommend the January $770 calls (AMZN170120C00770000), which expire on Jan. 20 and last traded at $37.62.

Portfolio Update

The election of Donald Trump as president of the United States rocked both the political and financial world.

But the negative effect on global financial markets proved to be much milder than the short-lived sell-off caused by the surprise Brexit vote in the United Kingdom on June 23.

After Brexit, it took the stock market several weeks to recover strongly. After Trump’s election, the stock market recovered even before it opened the next day in the United States.

I had advised you to suspend your stop prices in the Nov. 9 special alert. In light of the market’s surprisingly favorable reaction, I am recommending you restore these original stop prices.

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Nicholas Vardy

Nicholas A. Vardy

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