If there is one thing that has changed in recent years it is the way modern societies buy. Actions such as those of Amazon or Alibaba respond well to these events.
If there is a time of year when buying a stock and winning go hand in hand with 100% probability it is just this week.
And that stock is Amazon. Do you know why?
One of the best weeks for trading around the world began on Black Friday and we thought it was worth looking at the evolution of the world’s leading e-commerce site over the past few years.
Black Friday is not just another event for the marketing sector. If there is something that has changed in recent years, it is the way modern societies buy.
The ability to make purchases through a click has caused fewer and fewer citizens to go to the physical stores.
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How to make money off black friday?
The truth is that Black Friday begins a period of crucial sales for retailers.
Companies like Amazon, Wal-Mart, Target, among others, report up to a 30% growth in their sales thanks to this day.
Technology and the evolution of businesses such as Amazon or Alibaba have caused more than 6,400 stores of large chains to close in the United States alone.
And while Amazon has captured almost 50% of the world’s e-commerce, it only has 5% of the retail market.
This, in the opinion of analysts, gives the business a lot of room for growth and possibly a good performance of its shares on the stock market.
Discounts are multiplying and in this global competition to seduce consumers the two clear winners are the giants of e-commerce: Amazon and Alibaba, which manage to eclipse the traditional stores.
According to Citigroup, we should consider whether we really want a good Black Friday, as it simply means that “they have sold many products at a really low margin.
Seema Shah, an expert from Bloomberg’s analysis service, who believes that “any increase in sales comes at the expense of margins.
What are the best alternatives?
Taking into account ratios such as price/results (PER) for the next year, companies such as Gap, Macy, Kohl or Best Buy are among those trading below the industry average, around 26 times the results.
Companies like J.C. Penney or Amazon do so at an average industry premium, but the latter has a 20% revenue growth over the last year, while Penney has a 3% revenue growth.
Being a sector with different business models and areas, companies can have very different results.
And how do we minimize the risk of exposure?
The investment option would involve the use of an ETF with the same weighting to different areas, as it can be a way to gain exposure and minimize the risk of adverse movements.
What is the relationship between Black Friday and the stock market?
Americans often associate important events with stock market developments.
During these days they usually monitor the evolution of stocks linked to retail consumption, such as Amazon, Walmart, Alibaba, Costco, Target.
Many investors think that the sales report can influence the evolution of the stock market. Is there a reason for this?
If sales have been better or worse than expected, they can significantly move the stock market.
It is not a question of whether you have made a lot or a little money that day, but rather of checking people’s appetite for spending.
An increase in spending is a symptom that the economy is doing well. But if you’re spending less, it’s an indicator that something’s not working and people are afraid to spend.
The best investment on Black Friday?
In 2008, Mark Hulbert did a study with a sample of 114 years, to know what could happen in the stock market, taking as a reference what happened the day after Thanksgiving.
But you know what?
That study was inconclusive. The stock market will move up or down depending on factors unrelated to a particular day.
The truth is that Amazon is the consumer sector company that will grow its profits the most over the next three years, according to FactSet’s market consensus estimates.
Although Alibaba is not expected to increase its profits, the Chinese company’s shares are the most recommended.
In the coming months, they also have a potential of 30%, while those of Amazon has a path of 19%.
Do you want to think about Cyber Monday, that technological brother of Black Friday?
Well, we’ve put together a Special Report completely free of charge which you can see which are the best technological stocks on Wall Street.
Well, what do you think about the sales on Black Friday? I am waiting for your comments!