Ranking E-commerce Players
Estimize | Aug 23, 2016 12:29PM ET
Welcome to Forcerank research notes! Every week we will be giving you an inside peek at the consensus rankings for certain contests, analyzing results from past weeks, as well as reporting on any large shifts in the consensus or trends we are noticing.
It does that by boiling the stock market down to one simple question: will the price of stock ABC outperform stock XYZ this week? The best investors in the world strive to generate positive returns without exposing themselves to the wild swings of the market—using “market neutral” strategies based on the ability to identify outperformers and underperformers. Forcerank is designed to elevate those investors most skilled at this, acting as a proving ground for them to test their picks before they use them in the market. In each weekly contest, competitors are given 10 stocks to “Forcerank” by expected performance. So far we have found this data to be extremely predictive of actual weekly results.
In this week’s e-commerce game, we’ve asked competitors to rank Amazon.com (NASDAQ:AMZN), Priceline.com (NASDAQ:PCLN), Ctrip.com (NASDAQ:CTRP), Alibaba (NYSE:BABA), MercadoLibre (NASDAQ:MELI), Netflix (NASDAQ:NFLX), Jd.Com (NASDAQ:JD), eBay (NASDAQ:EBAY), Expedia (NASDAQ:EXPE), Groupon (NASDAQ:GRPN). In the chart below you can see the consensus ranking for each of these, as well the ranking from last week and actual results.
This week we’re seeing some interesting trends in Amazon.com (NASDAQ:AMZN), Priceline.com (NASDAQ:PCLN), Netflix (NASDAQ:NFLX) and Groupon (NASDAQ:GRPN).
1. Amazon.com (NASDAQ:AMZN): Amazon continues its upward momentum this week, topping the ecommerce game for a second straight week. A new peak in the On Balance Volume (OBV) technical indicator would suggest the stock still has room to run. Its 20 and 50 day moving averages remain well above its 200 day average with no signs of the gap closing any time soon. Retail strength this earnings season should bode well for Amazon in future quarters. Meanwhile, Amazon’s market share in the cloud computing space is only getting larger. The combination of this and improving retail sector will carry the stock to new heights
2. Priceline.com (NASDAQ:PCLN): Users are rethinking where Priceline should fall after it posted the biggest gains of all 10 ecommerce names in last week’s contest. The stock got a bump after Evercore ISI upgraded the name to a buy, citing “ scale advantage, execution track record, and value” as well as deep penetration in Europe. Shares continue to trade above its 20 day moving average thanks a recent batch of upgrades and strong volume. This week the online travel agency takes the second spot with contributors looking for a repeat performance.
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3. Ctrip.com (NASDAQ:CTRP)
4. Alibaba (NYSE:BABA)
5. MercadoLibre (NASDAQ:MELI)
6. Netflix (NASDAQ:NFLX): Average user rankings for the company have steadily declined over the past 4 weeks. In that time UBS downgraded the stock from buy to neutral. The news was enough to drop shares $10 and down in the Forcerank consensus rankings. Shares have since recovered and are currently trading in line with its volume profile. Netflix’s days as one of the highly touted FANG stocks are likely behind them but don’t expect this stock to slip past mediocrity. Recent deals with Comcast (NASDAQ:CMCSA), CBS, and the runaway success of its newest series Stranger Things should help keep the stock afloat. Furthermore a move to more hotel rooms could provide Netflix with a new source of revenue and subscription growth.
7. Jd.Com (NASDAQ:JD)
8. eBay (NASDAQ:EBAY)
9. Expedia (NASDAQ:EXPE)
10. Groupon (NASDAQ:GRPN): After strong quarterly results that sent shares soaring over 20%, it appears as if the stock is now overbought. Today, Groupon doesn’t look like the bargain it was 6 months ago. Despite a bounceback in the stock the company is still unprofitable and continues to post flat to negative sales growth. New management has done a good job exiting unprofitable markets and driving the stock with promising future guidance. However its current fundamentals have to improve to justify trading at this valuation. There is still a huge gap to be filled at $4 which is where Groupon appears to be headed. Last week this was the biggest loser, declining over 4%, and appears to be on pace to maintain that position.
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