'Death by Amazon': 20 once-thriving companies that find themselves in the e-commerce giant's crosshairs
- A new "Death by Amazon" index released by the investment-research firm CFRA tracks the stocks its analysts believe could be short-seller targets given their vulnerabilities to competition from Amazon.
- The index is full of home goods and electronics retailers like Party City and Bed Bath & Beyond - some of which have seen their entire market value wiped out in recent years.
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Investors are familiar with the "Amazon effect" by now.
The e-commerce juggernaut announces it's preparing to enter into an industry - be it medication, brick-and-mortar grocery, entertainment, or others - and the stocks of companies in the new target market fall as jittery investors are struck with the fear that irreversible disruption is coming.So the investment-research firm CFRA created a new index, called "Death By Amazon," that tracks the stocks its analysts think are particularly vulnerable to Amazon's expansion and offerings.
"The equally-weighted index serves as a retail performance benchmark and short-selling idea generation tool for our clients," CFRA analysts Camilla Yanushevsky and Todd Rosenbluth wrote in a report to clients earlier this month.
To pinpoint the 20 constituents the analysts believe are poorly positioned to compete against Amazon's efforts in various industries, they evaluated the companies' "Share of Voice" data that comes from web-traffic analytics company Alexa Internet (which is owned by Amazon as their other Alexa-named product).
That measure shows the percentage of searches for a keyword across major search engines in the last six months "that sent organic traffic to the respective site."
For example, the analysts compared how much traffic was going to a national jewelry retailer's website when consumers search for the term "jewelry" versus how much traffic was going to Amazon for the same search term.
With this kind of analysis, you get an index full of brick-and-mortar retailers whose products are available on Amazon - and apparently less popular through online searches - from floor tiles to party supplies.To be fair, it's not the first "Death by Amazon" index. Bespoke Investment Group had already created its "Death by Amazon" index, tracking the same theme.
Here are all the stocks listed, in alphabetical order, with how their "Share of Voice" scores for various products stack up against Amazon: