Amazon.com Inc. (AMZN - Free Report) has announced plans of opening its first Utah fulfillment center in Salt Lake City.This is in a bid to further speed up deliveries and meet customer expectations
Over the years, the company has been spending heavily on its new fulfillment centers. These are important in order to provide the level of service customers have started expecting from Amazon.
Last month, the online giant had announced its plans of opening fulfillment centers in the state of Oregon in Troutdale and Fresno.
Following the news, the company’s share price increased 1.86%. Also, in the last two years, shares of Amazon have steadily treaded higher. The stock has returned 119% compared with the Electronic Commerce industry’s gain of 65.3%.
More About the New Utah Facility
Fulfillment centers are giant warehouses that help online retailers in storing and shipping products and handling returns quickly.
According to Amazon, the new facility, spanning more than 855,000 square feet, will create more than 1,500 full-time jobs. The center will primarily focus on smaller items such as books, electronic devices and children’s toys.
Amazon stated that it pays competitive wages and gives healthcare and other full-time employee benefits to its workers. Additionally, the company offers programs like Career Choice to help employees pursue courses related to fields that are in demand. The online giant also provides other benefits like generous maternity and parental leaves.
Amazon has been strengthening its presence across the globe. To date, it has created millions of full-time jobs and continues to hire manpower to meet growing customer demand.
We feel, Amazon must maintain its U.S. market share while expanding globally in order to retain its leading position. For this, the company needs to invest more in fulfillment as well as technology and content, especially in international markets with less penetration and higher growth rates.
Although increased expenses may hurt the company’s bottom line in the near term, we believe this is necessary for the company to maintain its dominance in this highly competitive market.
Zacks Rank & Stocks to Consider
Currently, Amazon has a Zacks Rank #4 (Sell). Some better-stocks in the broader technology sector are Alibaba Group Holding Limited (BABA - Free Report) , PetMed Express, Inc. and Autobytel Inc. , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alibaba Group Holding Limited delivered a positive earnings surprise of 20.53%, on average, in the trailing four quarters.
PetMed Express delivered a positive earnings surprise of 9.32%, on average, in the trailing four quarters.
Autobytel Inc. delivered a positive earnings surprise of 41.98%, on average, in the trailing four quarters.
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