A major expansion by Amazon.com ( AMZN ) into private-label goods, which could come this month, elevates its ability to further challenge legacy retailers across the board. Cowen analyst John Blackledge estimates Amazon will be the No. 2 player in the $425 billion consumable market, excluding food and beverage, surpassing Walgreens Boots Alliance ( WBA ), CVS Health ( CVS ) and Target ( TGT ) but still lagging well behind market leader Wal-Mart ( WMT ). He defines consumables as four segments: personal care products, household products, baby products and pet products. Blackledge also estimates Amazon will be a top-10 player in the $785 billion food and beverage grocery market by 2019. “We are encouraged by Amazon’s growing footprint in this category, which we see as ripe for potential disruption, given younger demos increasingly purchasing grocery items via digital channels,” Blackledge wrote. The leader in the food and beverage category is Wal-Mart, followed by Kroger ( KR ), Albertsons/Safeway and Costco Wholesale ( COST ). Last week, the Wall Street Journal cited people familiar with the matter as saying Amazon is set in the coming weeks to roll out new lines of private-label brands that will include its first broad push into perishable foods. According to the Private Label Manufacturers Association, sales of private-label store brands in the U.S. topped $118 billion in 2015, with supermarkets and drug chains accounting for over $70 billion of the total. In the grocery and consumables market, Blackledge says, Amazon’s growth has come at the expense of Wal-Mart, Target. Walgreens and CVS. Amazon’s key competitive advantage is its multiplatform approach with Amazon Prime, which includes same-day delivery for many goods, “all of which should lead to rising number of consumers skipping the trip to the local supercenter, drug store or grocery market,” he wrote. Amazon has sold private-label products since 2009, primarily under the AmazonBasics brand, though that effort has concentrated largely on consumer electronics. Amazon stock rose 0.6% to 702.80 in the stock market today . Amazon stock hit an all-time high of 722.45 on May 12. It carries a strong IBD Composite Rating of 94, putting it among the top 6% of all stocks on key metrics such as revenue growth. Walgreens climbed 1.3% but CVS fell 1.5%. Target climbed 2.4%. Wal-Mart advanced 1%, hitting a nine-month high intraday, after spiking nearly 10% Thursday on strong earnings and same-store sales.
Hedge funds fled equities in the first quarter, with Apple ( AAPL ) and PepsiCo ( PEP ) the most-sold stocks, S&P Global Market Intelligence said in a report Wednesday . The top 10 hedge funds managed about $141 billion in equity holdings in Q1, down more than $18 billion from Q4 2015. The funds decreased the total number of stock positions held from 427 to 408, the fewest stock positions held since S&P Global Market Intelligence began tracking such data in 2014. It was the second consecutive quarter of equity sell-off by the large funds. Consumer discretionary and information technology stocks led the sell-off, with Apple ranked seeing the most selling for an individual stock last quarter. The major hedge funds sold $5.4 billion worth of Apple stock in Q1. Other top sells included PepsiCo ($1.8 billion), Amazon.com ( AMZN ) ($1.4 billion), Priceline ( PCLN ) ($1 billion) and Walgreen Boots Alliance ( WBA ) ($1 billion). The highest volume of buying among the top hedge funds occurred in Facebook ( FB ) stock, with a total of $2.3 billion in buys in the first quarter, S&P said. Other top buys included Broadcom ( AVGO ) ($1.5 billion), Alphabet ( GOOGL ) ($945 million), Eli Lilly ( LLY ) ($892 million) and Willis Towers Watson ( WLTW ) ($884 million). RELATED: As Growth Investors Flee Apple, Warren Buffett Sees Value Startup Bubble Bursting, Valuations Due For Reset, Analyst Says .
Loading the player… Amazon ( AMZN ) has solidified its position as an e-commerce leader, and its global takeover may happen sooner than you think. ‘Momentum’ Seen In Apparel A Cowen & Co. report out Wednesday forecasts Amazon displacing Macy’s ( M ) as the No. 1 U.S. apparel retailer by 2017, driven by selection, fulfillment and brand relationships. Amazon’s momentum in apparel is also seen leading to retailer mergers and acquisitions, as well as store closures. Cowen also projects that Amazon will displace Target ( TGT ), Walgreens ( WBA ) and CVS ( CVS ) to become the No.2 company in consumables, behind Wal-Mart ( WMT ), by 2018. The report calculates a compound annual growth rate of 27% for the e-commerce giant’s consumables market. Amazon Worth $3 Trillion? Meanwhile, Social Capital has set a very bullish $3 trillion, 10-year valuation on the stock, with the venture capital firm citing strength across retail and its Amazon Web Services segment. Amazon’s current market cap is about $314 billion, while Apple — the most valuable public company — has about a $515 billion market cap. IBD’s take: How does Amazon stack up vs. its peers? Find out at IBD Stock Checkup After gapping up on its strong earnings report last week, shares are now extended 10% from a cup-with-handle buy point initially cleared in mid-April. The stock is trading about 5% below its all-time high reached at the end of last year, and it was down 1.4% Thursday. Wal-Mart, Macy’s Stocks Lag Meanwhile, Wal-Mart recently plunged below its 50-day line and has yet to retake that level, as it slumped 0.6% in intraday trade. Shares are sitting 16% below their 52-week peak. And Macy’s shares are trading nearly 50% below their all-time high reached last July. They are on track to hit a nearly four-month low Thursday, falling 2.3%.