This week’s Alpha Algorithm returns to a previous recommendation: online shopping giant Amazon.com (AMZN).
Despite hitting its stop in your portfolio on a June 9 sell-off in the tech sector for a 15% gain, Amazon remains a great favorite of the Alpha Algorithm investment strategies. Founded in 1994 and headquartered in Seattle, Washington, Amazon 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.
Amazon.com (AMZN) vs. the S&P 500 year to date.
13 Top Investment Strategies Betting on Amazon.com (AMZN)
- Hedge Fund Alpha
Based on publicly available disclosures, successful hedge-fund managers are investing in the stock.
- 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.
- Pure Growth
The company is part of a strategy that selects companies 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.
- 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.
- 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.
- 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.”
- 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.
- 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.
- 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.
- Goldman Sachs Hedge Fund Index
The stock is part of the Goldman Sachs Hedge Industry Index, which tracks an equal-weighted index of the 50 most-frequently held U.S. companies selected from the portfolios of hedge funds.
- Billionaire Bet
The stock is one of 30 U.S. companies tracked in an equal-weighted index selected from the portfolios of 10 asset managers with a personal net worth of at least $1 billion.
- 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.
- Large-Cap Alpha Core
The stock is one of a tiered, equal-weighted index of large-cap stocks selected from the S&P 500 that are expected to outperform the broader large-cap space based on an intricate methodology of ranking stocks according to their recent performance.
Recommendation
Buy Amazon.com (AMZN) at market today. Place your initial stop at $920.00.
Options
If you want to play the options, I recommend the AMZN September $1,000 calls (AMZN170915C01000000), which last traded at $49.75 and expire on Sept. 15.
Portfolio Update
Sell half of your BA August $190 calls (BA170818C00190000), which last traded at $12.19, for a 134.42% gain.
On June 15, you stopped out of Walmart (WMT) at $77.80 for a 10.78% gain.
Raise your stop in Adobe Systems (ADBE) to $142.65 to lock in at least a 10% gain in the stock.
Sincerely,
Nicholas A. Vardy
