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Amazon is the ultimate disruptor, this investor says

Constellation Software
James Telfser

Technology companies are continuing to have a rough go of it this week, with shares of Amazon, Alphabet, Netflix and Facebook all posting more than three per cent losses in Tuesday’s trading. A sign of things to come? Not likely, says portfolio manager James Telfser, who believes that innovation in the tech sector will keep companies like Amazon growing for years ahead.

The four so-called FANG stocks experienced major selloffs yesterday, as investor continue to be skittish in light of concerns over privacy in the industry and impending regulation. Together, Facebook, Amazon, Netflix and Alphabet lost US$86.6 billion of value in one day’s trading.

But in reality, those dips are there to be taken advantage of, says Telfser, who claims that in Amazon’s case, well-publicized grievances between founder Jeff Bezos and US President Donald Trump say nothing about the company’s core strengths.

“Amazon is the ultimate disruptor —it’s one of those companies that we’re all using a lot more and I think that’s just a global phenomenon,” Telfser, partner and portfolio manager for Aventine Asset Management, told BNN yesterday.

“From a fundamental perspective, with all this banter back and forth on Twitter about Amazon and the White House, a lot of that is noise,” he says.

Now valued at more than US$700 billion and with annual revenues approaching US$180 billion, Amazon is the fourth most valuable company in the world and is in the running to become the world’s first trillion-dollar company.

“We think a lot of this tech selloff is really more short-term focused. We believe that there are a lot of huge secular trends in technology right now, with artificial intelligence, the Internet of Things,” says Telfser. “I think there’s a lot going on there and a lot of these tech companies are going to benefit from it down the road. So if technology in general rises, Amazon will rise with that. If you are of that view, you could probably get a reasonable price on a very high quality stock.”

Even with the recent drops in share prices, both Amazon and Netflix are is still up for the year, Amazon by almost 25 per cent while Netflix has risen a sparkling 55 per cent. Last week, Netflix reported its quarterly earnings, which beat expectations, while tomorrow, Amazon will report its Q1/18, with expectations that the retail behemoth will post a 40 per cent year over year gain in revenue, up to US$49.92 billion.

Disclosure: Cantech editor Nick Waddell owns shares of Amazon.

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About The Author /

Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.
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