Retail
10 Companies That Would Love It If President Trump Goes After Amazon
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Is it possible that the high and mighty Amazon.com Inc. (NASDAQ: AMZN) might have finally become so big and powerful that politicians actually go after the company where it hurts the most? A report from Axios signals that President Trump is obsessed about Amazon. The points brought up by Axios generally have been well known for the better part of a decade, and state and local politicians have complained about these tax points for years. The president also has been vocal about Amazon and founder Jeff Bezos before on multiple occasions.
But when you consider the taxes angle, the real estate angle and even the political angle, it’s important to understand what would happen if the president and federal regulators really did go after Bezos and Amazon. The reality is that many companies would love to see Amazon get its wings clipped.
While the U.S. Postal Service has been addressed before, with mixed views, it’s important to look beyond a single report. If the president were to target Amazon in one of multiple ways, there are dozens of large companies that could easily benefit from the effort. In fact, their CEOs might even send thank you notes to anyone able to reign in Amazon’s might in retail. A few hundred cities and counties also might appreciate the potential sales taxes and the real estate taxes from the brick-and-mortar stores that have closed.
24/7 Wall St. has identified 10 large companies that probably would love to see President Trump or any other politicians and regulatory agencies go after Amazon in any manner possible. Two of these have been combined because they are so similar, and we have included dividend yields and the relation to past highs as an example. Again, this is just a sample of the companies, as there are literally too many to name that could benefit if Amazon gets targeted.
Digital Realty
> Market cap: $22 billion
Digital Realty Trust Inc. (NYSE: DLR) is a real estate investment trust (REIT) focused on owning data centers with colocation and interconnection strategies for many of the largest companies and enterprises. While it is not a retail play, imagine how the company might win if Amazon Web Services (AWS) was somehow carved out of the online retailing strategy, with its thousands of vendors who use AWS and sell through the Amazon third-party platform. You could argue the same for other companies, but Digital Realty shares were last seen up 1.7% at $104.45 on Wednesday. That is down about 18% from its 52-week high of $127.23. Digital Realty now has a dividend yield of almost 4%.
Dollar General
> Market cap: $25.5 billion
Dollar General Corp. (NYSE: DG) would love to see Amazon get its wings clipped. While the “dollar store” has reached up and now includes many items priced well above a $1.00, the reality is that Dollar General competes against many retail categories now. It’s also hard to do online-only living with selling lower-priced items when consumers are often spending hundreds of dollars at a time through Amazon. Dollar General shares were last seen up 1.9% at $94.15, which is 11% lower than its 52-week high of $105.82.
Kimco Realty
> Market Cap: $6.2 billion
Kimco Realty Corp. (NYSE: KIM) is one of North America’s top REITs that owns and operates open-air shopping centers in major metro areas. If more and more people do not want to own cars, and if they don’t want to go out shopping indoors, they are far more likely to be an Amazon web potato. Kimco shares were last seen up 2.7% at $14.51, in a 52-week range of $13.69 to $23.03. And while it has a dividend yield of more than 7%, its shares are currently less than half of the $32 share price that was seen in mid-2016.
Kroger
> Market cap: $21 billion
Now that Amazon has taken over Whole Foods, one obvious beneficiary would be Kroger Co. (NYSE: KR). Being a massive retailer competing with Walmart and Whole Foods was hard enough, but adding Amazon into the mix made this much more relevant beyond theory. Kroger shares were last seen up 1.8% at $23.90 on this report.
24/7 Wall St.Macy’s
> Market cap: $8.9 billion
Macy’s Inc. (NYSE: M) is now smaller than rival Kohl’s Corp. (NYSE: KSS), but the mall-based department store chain’s shares have beaten up its investors far more. Macy’s still needs to improve its lineup and feel of the stores, with or without Amazon being targeted. Still, its shares were up 4.4% at $29.08 on Wednesday. That may not look too bad against a 52-week trading range of $17.41 to $31.04, but Macy’s was a $69 stock back in mid-2015. Kohl’s shares were also up 3% at $64.71.
Sears/Kmart
> Market cap: $288 million
Sears Holdings Corp. (NASDAQ: SHLD) is far smaller in market cap than it used to be, and its stock valuation understates its former glory days by a major scale. Sears and Kmart more or less epitomize the message of failed brick-and-mortar retailers with too many closures to even measure, far worse than the likes of J.C. Penney and other large retailers. Sears’ stock is only at $2.72 now, but that is up almost 9% on the day alone. This low price is not even 24% of the 52-week high of $14.32, and we don’t need to remind investors that this used to be well over $100 nor that Sears used to be one of the best retailers of past generations. Investors should still consider this one thing: even if Amazon somehow closed up shop and vanished, which no one at all is calling for nor predicting, it might not be enough to save Sears and Kmart.
Simon Property Group
> Market cap: $55 billion
Simon Property Group Inc. (NYSE: SPG) also would love to see Amazon get pressured. After all, Simon is the REIT owner of many of the nation’s top shopping malls, as well as dining, entertainment and mixed-use destinations. Simon Property’s operates many of the top malls in the nation, and it owns many dozens of malls and destinations. It even still has a 5% dividend yield. Simon Property shares were last seen up 2.2% at $153.85, but that is down over 12% from the 52-week high of $176.17, and it’s still down over 30% from the mid-2016 high of $227 or so.
Target
> Market cap: $38 billion
Target Corp. (NYSE: TGT) may have been rumored to be a potential Amazon takeover target. The analyst report that caused the story to become so widespread has been debated by many investors, but what is not debatable is that Target has had a hard time getting its grocery sales and other sales trends remaining in place. And despite a big gain on this report, Target still would have to recover another 10% to hit its all-time highs. Target shares were last seen up 3.6% at $70.99.
24/7 Wall St.Walgreens
> Market cap: $66 billion
Walgreens Boots Alliance Inc. (NASDAQ: WBA) has been challenged in the age of Amazon, the rise of pharmacy competition and the combined combination into health care insurance and medical services. With Amazon getting into health care initiatives, Walgreens and other pharmacies would love if their fiefdoms were better protected. Walgreens shares were last seen up 0.9% at $66.60, but that is down 25% from its 52-week high of $89.69 and still down over 30% from its high of $96 or so back in mid-2015.
Walmart
> Market cap: $259 billion
Walmart Inc. (NYSE: WMT) is the world’s largest brick-and-mortar retailer, and it has so far changed its offerings handily over time. It also has pursued an e-commerce and customer service strategy that has had mixed reviews. Walmart has directly targeted Amazon and is deemed one of the few companies ultimately strong enough to withstand the Amazon threat. That said, its stock, even with a 1.7% rise to $87.50 on Wednesday, was last seen down a sharp 20% from its recent all-time high of $109.98.
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