New York, NY (PRWEB) September 04, 2012
In a recent Investment Contrarians article, editor Sasha Cekerevac reports that competition with technology stocks is going beyond product offerings and is now encroaching on delivery options, as Amazon.com and eBay are each working on a same-day delivery option. However, Cekerevac contends that the implementation of this service could mean a steep decline in corporate earnings for each company.
“Even though revenue can increase, corporate earnings can decline because of the costs associated with the establishment of distribution warehouses and logistical software; running a same-day operation is not a simple offering,” notes Cekerevac.
Both of these technology stocks will only see a marginal increase, if any, in corporate earnings because of the delivery service itself, Cekerevac claims, even though the hope is to drive traffic to their existing products, which have a higher profit margin, to increase corporate earnings.
Amazon.com already offers “Prime,” a two-day delivery service for which members pay a flat fee of $79.00 per year. In the absence of official numbers from the firm, Cekerevac notes that rumors suggest its delivery offerings are already losing money for the company; a same-day service would most likely be a negative for corporate earnings going forward, reasons Cekerevac.
While the Investment Contrarians editor likes the competition between these technology stocks, he points out that there is, of course, the problem that because of the intense competition between these technology stocks, even if corporate earnings get hit, they would still need to offer such a delivery service just to keep up with each other.
“…You can bet that these technology stocks will continue to battle it out,” he concludes.
To see the full article and to get a real contrarian perspective on investing and the economy, visit Investment Contrarians at http://www.investmentcontrarians.com.
Investment Contrarians is a daily financial e-letter dedicated to helping investors make money by going against the “herd mentality.”
The editors of Investment Contrarians believe the stock market and the economy have been propped up since 2009 by artificially low interest rates, never-ending government borrowing and an unprecedented expansion of our money supply. The “official” unemployment numbers do not reflect people who have given up looking for work and are thus skewed. They believe the “official” inflation numbers are also not reflective of today’s reality of rising prices.
After a 25- to 30-year down cycle in interest rates, the Investment Contrarians editors expect rapid inflation caused by huge government debt and money printing will eventually start us on a new cycle of rising interest rates.
Investment Contrarians provides unbiased research. They are independent analysts who love to research and comment on the economy and investing. The e-newsletter’s parent company, Lombardi Publishing Corporation, has been in business since 1986. Combined, their economists and analysts have over 100 years of investment experience.
Find out where Investment Contrarians editors see the risks and opportunities for investors in 2012 at http://www.investmentcontrarians.com.
George Leong, B. Comm., one of the lead editorial contributors at Investment Contrarians, has just released, “A Problem 23 Times Bigger Than Greece,” a breakthrough video where George details the risk of an economy set to implode that is 23 times bigger than Greece’s economy! To see the video, visit http://www.investmentcontrarians.com/press.