Investors are familiar with the Amazon effect by now.
The e-commerce juggernaut announces that it is 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, “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 its other Alexa-named product).
That measure shows the percentage of searches for a keyword across major search engines in the past 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:
Related: Amazon CEO targeting $47 billion market
1. At Home Group (HOME)
1-year performance: -40%
% below all-time high: -46%
Share of Voice score for “seasonal decor”: 4.2%
Amazon's Share of Voice score for “seasonal decor: 19.6%
2. Barnes & Noble (BKS)
1-year performance: -0.1%
% below all-time high: -84%
Share of Voice score for “books”: 23.2%
Amazon's Share of Voice score for “books”: 12.2%
3. Bed Bath & Beyond (BBBY)
1-year performance: -16%
% below all-time high: -80%
Share of Voice score for “cookware”: 2.4%
Amazon's Share of Voice score for “cookware”: 23.3%
4. Best Buy (BBY)
1-year performance: -14%
% below all-time high: -19%
Share of Voice score for “electronics”: 1%
Amazon's Share of Voice score for “electronics”: 8.1%
5. Big Lots (BIG)
1-year performance: -6.5%
% below all-time high: -41%
Share of Voice score for “cookware”: 0%
Amazon's Share of Voice score for “cookware”: 23.3%
Full story and list of companies at BusinessInsider.com
