The company has not really added much lately to their bag-of-tricks. Their top line is growing at a decent clip, but the Law-of-Large-Numbers will catch up with the 100 multiple (trailing) on this stock.Analysts are expecting an average growth rate of 25% over the next 5 years. That is assuming that the consumer continues to spend like we are in a major expansion. With a PEG of over 3.60, there are way too many "ifs" in the stock price and it is over extended.
I bought puts with AAPL on a daytrade today, but I don't make it a point to short stocks of good companies with an outstanding outlook, so I covered these puts at the close.
AMZN, on the other hand, had their holiday season grow by 20% year over year. That doesn't rate a 100 multiple. It doesn't rate a 50 multiple in a growing economy.
If there is multiple compression based on the economy, this stock is about to roll over. It is up 180% for 2007. I hope folks took profits - I added to my puts at close today.
The chart is interesting. Today may have formed an island reversal. Monday may confirm this. I am looking at the chart around $87.00. That is the trend line. I will add to my puts (actually start buying February strikes) below $87.00.
http://stockcharts.com/h-sc/ui?s=AMZN&p=D&b=4&g=0&id=p99117822189&a=126326587
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