Cho Research

About the Author Cho Research

Best tech/finance blogger on TipRanks. Alex Cho is ranked 7th among all financial bloggers, with a sector focus of technology stocks. The research he publishes captures the long-term growth potential of tech franchises, and market valuation. His research recommendations over the span of five-years has averaged into an annualized return of 19.3% across 392 ratings of which 66% were successful. Over his years of publishing, Alex Cho has been an indispensable source of information for an investment minded audience, which is why his lifetime viewership has exceeded ten million in total since 2012, across various media platforms. Furthermore, he’s frequently cited in various local business journals across the United States, and is frequently tagged with the “in-depth” designation on Google News for his public articles. The quality of his research is well known, and is well-respected which is why he’s frequently cited by other authors, journalists, bloggers and experts. Alex Cho was a former founding partner of Alexander & Cohen Capital Management, has worked as a consultant for mid-stage tech companies looking to raise capital or form an exit strategy, with the most recent consultation billed to a client that was generating revenue of $10 million+ in the web domain/registrar segment. Alex Cho is frequently invited to interview members of management at various Fortune 500 tech companies’ due to his outstanding media credentials, and credibility. Furthermore, he frequently attends various tech media events at the request of the event organizers. Alex Cho has a great relationship with Wall Street and Silicon Valley, as well. In the Venture Capital Space, he has sources that are inclusive of VC Partners, and independent research from PitchBook, Mercury Data, eMarketer, MergermarketGroup, and so forth. Anyone facing the public with investment related material needs quality sources, which should be inclusive of insights from Private Equity and various sell-side institutions and debt rating agencies as well (Standard & Poor’s, Fitch, & Moody’s). Alex Cho publishes with the support of Bank of America Merrill Lynch, Morgan Stanley Americas, Royal Bank of Canada Capital Markets, United Bank of Switzerland AG, Barclays Americas, Goldman Sachs, J.P. Morgan, Credit Suisse AG, PiperJaffray, Wedbush Securities, Oppenheimer & Co., Nomura Securities, BMO Capital Markets, Raymond James, Pacific Crest, SunTrust, Mizuho Securities, Deutsche Bank and Canaccord Genuity. Alex Cho attended ASU via the MAPP program with a 3.76 GPA in business-finance. The genius behind Cho has less to do with his academic accomplishments, but rather his ability to navigate, adapt, and improve the quality of his work through all the activities he has engaged. In the past year, Alex Cho has launched a new marketplace service referred to as Cho’s Investment Research. To learn more about this service, or to receive article notifications, be sure sure to subscribe. We provide frequent updates via our Blog Posts, which goes out to our subscribers.

Amazon (AMZN) Makes Strides in the Grocery Game; Stock Remains a Strong Buy

Amazon (AMZN) is set to leverage its global e-commerce footprint tied to its grocery chain acquisition of Wholefoods Market in the coming days.

What has changed is the usage of prime subscriptions tied to the e-commerce business to give customers of Wholefoods a discount at checkout. On first impression the entry into the grocery segment has been a bit of a rocky one, but it did lead to some revenue and earnings accretion in the past year.

Now, we see Amazon unfolding the rest of its strategy tied to the Wholefoods acquisition with what could be a major shift in grocery market share in the coming years. Prime subscribers can anticipate a 20% price reduction on various food items from WFM, and with that reduction we’ll see a divergence in pricing trends unlike what we’ve witnessed in the past couple years.

Source: Morgan Stanley

The average basket of goods pricing has remained relatively stable, according to Morgan Stanley, but with the introduction of Prime Discount for 300 items, according to various media reports, we can anticipate that the basket price will trend considerably lower to perhaps $170-$180 based on recent data. The drop in pricing would make Amazon hyper competitive with competing grocers like Kroger (KR) and Wal-Mart (WMT), who continue to bleed market share in virtually every category, anyway.

Keep in mind, Amazon has around 100 million Prime subscriber currently, and the introduction of this added perk could increase demand for Prime subscriptions. Prime Subscription are starting to become a catch-all feature tied to the Amazon ecosystem, and like a Costco Card, Amazon customers can expect the same sort of treatment when they buy groceries at its own in-house grocery chain. What this all leads to is premium food coming down in price, and with more consumers preferring organic foods, or foods that are sourced responsibly, the appeal this might have is somewhat unprecedented, but it does come at a great time for Amazon looking for ways to gain market share against its number 1. rival Wal-Mart.

Wal-Mart also isn’t known to source the same high-quality foods as Whole Foods Market, and with the prospective risk that Whole Foods is now pivoting to a Costco like business model with the world’s number 1. E-commerce Retailer to back-it-up, or fuel the expansion efforts, we should see more activity at Whole Foods Market stores in the coming weeks, if not the coming months. If anything, Amazon is starting to suck the oxygen out of the grocers, and within the next few-years business results at the competing grocery chains could start to tumble (similar to what we’ve seen in a number of other retail categories where Amazon extinguished competition with lower pricing at mass scale).

Amazon stock was relatively unresponsive to the announcement, but the added foot traffic tied to a brick-and-mortar experience, and also tied to its online e-commerce platform does create some much-needed synergies. Furthermore, Amazon is the type of company that would burn some cash just to take a stab at its rival, Wal-Mart in the brick-and-mortar segment.

Following the news, Wal-Mart shares promptly declined by 1% on the session, because it implies that more consumers (roughly a third of all U.S. consumers) will now get flooded with Amazon Prime related deals tied to Whole Foods Market, and with this transition, Amazon’s promotional efforts will sway the buying habits of consumers looking to save money, but still buy high quality produce.

The pivot towards groceries was meant to be a highly-technological leap, but instead it turned into another catch-all feature tied to Amazon’s membership subscription business. Maybe, Amazon doesn’t reinvent the brick-and-mortar experience, but then again, do they really have to? They have 100 million subscriptions that help subsidize the cost of groceries.

All in all, Alphabet is a Wall Street favorite, earning one of the best analyst consensus ratings in the market. TipRanks analytics exhibit AMZN as a Strong Buy. Out of 36 analysts polled by  in the last 3 months, 35 are bullish on Amazon stock while only one remains sidelined. With a return potential of 17%, the stock’s consensus target price stands at $2,125.16. (See AMZN’s price targets and analyst ratings on TipRanks)

Disclosure: The author doesn’t own a position in AMZN or WMT.


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