Returning to a Retail Giant and Notching Another 15% Gain

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 Amazon.com (AMZN).

Recall that you already have booked a 15% return and then a 10% gain in the stock. Despite hitting its stops on occasional pullbacks in the stock, Amazon.com remains a great favorite of the Alpha Algorithm investment strategies.

Founded in 1994 and headquartered in Seattle, Washington, Amazon.com 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 2-16

Amazon.com (AMZN) vs. the S&P 500 over three months.

11  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

Amazon 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. Pure Growth

The company is part of a strategy that selects stocks from the S&P 500 Index, based on three growth factors: current internal growth rate, historical earnings per share (EPS) growth and historical sales/share growth.

  1. 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.

  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. 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.

  1. 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.

  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.

  1. Large-Cap Momentum

The stock is part of a major hedge fund’s systematic strategy that invests in large- and mid-cap U.S. companies with positive momentum and that rank in the top third of total return over the prior 12 months, excluding the last month.

Exclusive  Monthly Income -- “Preferred”

Recommendation

Buy Amazon.com (AMZN) at market today. Place your initial stop at $770.00.

Options

If you want to play the options, I recommend the April $845 calls (AMZN170421C00845000), which expire on April 21 and last traded at $25.14.

Portfolio Update

You stopped out of Facebook Inc. (FB) for a 15.01% gain just since Dec. 1.

With your current stops in place, you have double digits gains locked in for Altria Group (MO), Apple (AAPL) and Home Depot (HD).

VAA 2-16-2

Sincerely,

Nicholas Vardy

Nicholas A. Vardy

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