The issue now, he said, was what impact the Kindle Fire will have on the company’s first-quarter guidance.
Last quarter, Amazon.com reported an operating margin below 1 percent.
“Once you do start to see some of that inflection occur, you’ll be layering on very strong revenue growth — 40 percent plus — in addition to margin expansion. I think at that point, the story looks very good,” Sena said. “We just don’t know when that inflection exactly will be.”
Sena said over the past two years, Amazon.com was trading at a 50 percent premium to its 200-day average.
“At this point this year, it’s below,” he said. “While there is excitement over the revenue of what the Kindle Fire could bring, I think there is some concerns over margin weighing down.”
In its favor, Amazon.com delivers customer purchases preloaded on the Kindle, which also provides a platform for future online purchases, Sena said.
“That bodes well for Amazon,” he said.
Looking at options activity for the day, trader Scott Nations said Amazon.com stock price found a floor.
“I think the interesting option play here, though, is in Barnes & Noble ,” he said.
BKS sells the Nook, yet another rival to the Kindle Fire.
Nations noted that four calls were traded for every put, with call volume at three times the daily average.
“I was really surprised. I didn’t think there was room for a third tablet option,” he said. “The stock is on fire and people want upside.”
Karen Finerman said the issue wasn’t whether the Nook was good.
“The question is: Can they make the transformation? That’s a much, much more difficult thing to do,” she said.
In a related note, host Melissa Lee noted Barclay’s “overweight” rating of Corning
“This is a name I think you can own here,” hedge fund expert Tim Seymour said. “Especially if all the things we’re saying about Apple and these guys are true.”
Joe Terranova called the sustainability of Corning’s strength into question.
“When you look at today’s price action in Best Buy it tells you that there potentially is not this overall sustained theme,” he said.
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Trader disclosure: On Nov. 28, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Terranova; Long: VRTS, LQD, MUB, AXP, LULU, DECK, SBUX, CAT, CSCO, CAT, HES, EMC, IBM, SU; Adami: Long: NUE, MSFT, BTY, AGU, C, GS; Seymour: Long: AAPL, BAC, INTC; Finerman; Long AAPL & short calls, Long BAC, JPM-long stocks and leap options, YHOO-long stock short calls, IBM-long stock short calls; Short: SPY, IWM, MDY, SPY; Nations; long SPY, AMZN Call spreads, long volatility (by being long options but no VIX futures or options positions); Weiss: Long EUO, QCOM, NFLX Puts, HPQ, DE, MDRX
For Ken Sena
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