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QuestionsCategory: Valuation QuadrantAmazon Valuation
Theodore Tan asked 5 months ago

Hi Victor!
May I know how did you get Ave P/CF ratio for Amazon to be at 31?
I tried

  1. 10 year data and got Ave P/CF of 23.2 and
  2.  5 year data and got Ave P/CF of 24.128

 
May I know if I have make a mistake somewhere?

Attachments
Kate Tiw replied 5 months ago

hi Theodore, may i know how you could get this info populated so fast in excel? is there tool to get this?

Kate Tiw replied 5 months ago

Ops.. not sure why it posted multiple times, sorry about that. Btw, I figured out the video from Victor and manage to plot the chart.

Darren Seah replied 5 months ago

Hi Theodore, can I check what adjustments did you make for the cashflow values for 2016 and 2017?
Thanks.

Theodore Tan replied 5 months ago

You have to input 2020 figures in Year 2021. 2019 figures in Year 2020 PE etc…

Darren Seah replied 5 months ago

Hi Theodore, I was actually referring to your operating cashflow values as per your attached pic.

The figures for 2016 and 2017 are different from what I have as follow:

FY2020: $66,064
FY 2019: $38,514
FY 2018: $30,723
FY 2017: $18,365
FY2016: $17,203

Victor Chng replied 5 months ago

Hi Darren,

Your figures are correct. The attached picture have some figure that are incorrect.

Darren Seah replied 5 months ago

Ok thanks a lot, Victor :)

Victor Chng replied 5 months ago

Welcome Darren :)

4 Answers
Victor Chng answered 5 months ago

Hi Theodore, 
 
It is hard for me to look through the figures using image. Can you send the excel to victor@fifthperson.com

Victor Chng answered 5 months ago

Hi Theodore,

I have look through your excel valuation on Amazon. Your figures are all correct after adjusting the years as mentioned by you in the email.

For Alibaba, you can just use PE ratio to value. Price to cash flow valuation is better for companies with cash flow more than net income by two times.

P.S: LOL I am just stating facts about Comfort Delgro :)

Theodore Tan replied 5 months ago

Thanks, appreciate your teaching. For everyone new here, I must say Fifth Person is very sincere and very open about sharing if you know how to ask questions

Victor Chng replied 5 months ago

Thank you for your kind words Theodore :)

Theodore Tan answered 4 months ago

Hi Victor,
Amazon shares are falling. Seems really attractive now. It is the first time after Covid prices.
https://finance.yahoo.com/news/4-reasons-why-amazon-stock-is-getting-nailed-115415704.html
They also got hit with about USD 800 million fine.
Should I minus them off the operating cash flow and re-price the stock for entry?
https://www.reuters.com/business/retail-consumer/amazon-hit-with-886-million-eu-data-privacy-fine-2021-07-30/

Victor Chng answered 4 months ago

Hi Theodore,
 
The fine is an exceptional item so it should not be removed from the operating cash flow. You can add the figure back. 

Victor Chng replied 4 months ago

but of course if you want to be conservative then include the fine.

Theodore Tan replied 4 months ago

Thank you! Can I use trailing Operating Cash Flow (59,323) to retreive my cashflow per share?
Hence my P to OCF is 25.4 and OCF/share is USD 113
Price to enter is roughly USD 25.4 x 113 = USD 2,950

Theodore Tan replied 4 months ago

https://www.reuters.com/business/retail-consumer/amazon-faces-more-than-slowing-sales-growth-it-needs-more-warehouses-2021-07-30/

Looks like no fundamental impact. Just cause of concern due to demand from customers