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The Zacks Analyst Blog Highlights: Amazon, Alibaba, Walmart, Berkshire Hathaway and JPMorgan Chase

Zacks Equity Research
Updated
Investors need to pay close attention to Yelp (YELP) stock based on the movements in the options market lately.

For Immediate Release

Chicago, IL –July 17, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Amazon AMZN, Alibaba BABA, Walmart WMT, Berkshire Hathaway BRK.B and JPMorgan Chase JPM.

Here are highlights from Monday’s Analyst Blog:

What Everyone Needs to Know About Amazon Prime Day

Amazon’s big shopping day for Prime members, akin to Alibaba’s Single’s Day, is kicking off today. Other than that, this roundup covers its PillPack acquisition, foray into network switching, Go Store additions, Chile expansion and logistics rumors.

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Prime Day

Amazon continues to advertise the fact that it is helping SMBs by increased exposure on Prime Day. But what it’s really doing is making more money out of them. Participating third-party sellers who didn’t need to spend anything the first two years, spent $500 per lightning deal last year and are being charged $750 this year. They are also being encouraged to spend on advertising because of the typical increase in impressions and ad-attributed sales during this period.

Meanwhile, it has ensured that the biggest deals are on Alexa-enabled products like the Echo family, Fire TV and Fire tablets, because these devices will help extend its reach to more people.

What’s more, there are also huge discounts on Amazon private label products from Stone & Beam, Rivet, Presto!, Wickedly Prime, Solimo, Goodthreads, Daily Ritual and AmazonBasics among others, covering categories like apparel, accessories, furniture, home décor and more.

So it’s possible that Prime Day is really big for Amazon but not as great for sellers. Post-event news will tell us more.

Overall, there are more than a million deals for customers in the U.S., U.K., Spain, Mexico, Japan, India, Italy, Germany, France, China, Canada, Belgium, Austria and, for the first time, Australia, Singapore, Netherlands and Luxembourg. The deals will be unlocked on Prime Day today and extend till end-of-day tomorrow. The event is designed to attract customers toward buying Prime subscriptions so Amazon can be their go-to place for shopping.

Coming off a strong 2017 for things like pencils, pens, notebooks, glue sticks, lunchboxes and backpacks, Amazon announced special deals targeting the back-to-school and off-to-college crowd. A June 2018 poll conducted by the National Retail Federation and Prosper Insights & Analytics found that more than a third of back-to-school and off-to-college shoppers did their shopping on Prime Day 2017 and more than half intend to do it on Prime Day 2018.

Plus there are special deals for U.S. customers at Whole Foods stores that could endear it to more people. In the days leading up to Prime Day, customers spending $10 in a single invoice in any store will get $10 to spend on Amazon during Prime Day, eligible Prime Rewards Visa card members will get additional 10% off, Prime members shopping Whole Foods for the first time will get $10 off their first purchase and $10 credit toward a future purchase, and many stores also have deals on Alexa powered devices.

Amazon is also arranging for surprise entertainment events unboxed from giant Smile boxes in major cities.

PillPack Deal Will Lower Prices

Amazon is reportedly buying startup PillPack for a billion dollars, possibly also outbidding Walmart.

PillPack, which has thousands of customers across 49 states, helps people take their prescriptions by determining whether any of the medications counteract each other and then presorting and packaging them into their daily doses and mailing them a supply every 14 days. It’s therefore particularly useful for chronic or aged patients, or those who have multiple illnesses. It’s also particularly helpful because it deals with insurance companies on behalf of patients. Pillpack’s fees are included in the copayment paid to insurance companies.

Amazon already sells non-prescription (over-the-counter) medication for aches, colds and allergies through its Amazon Basics private label, and this acquisition is likely to broaden its scope into the prescription pharmacy business. To lay the foundation, Amazon tied with Berkshire Hathaway and JPMorgan Chase to form an entity without a profit focus that could create “technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.”

It’s easy to see how PillPack could fit into the scheme of things, but implementation probably won’t be easy because of the pharmacy benefits managers that operate as gate keepers. The positive here is that Amazon and its partners are deep-pocketed, so they might be able to wrest business for the ultimate benefit of employees.

For comparison, Walmart offers a similar service wherein it charges $4 for a month’s supply of generic prescription drugs. So for Amazon’s initiative to be effective, it must price lower.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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