For many years, investors have been very tolerant as Amazon.com has sacrificed profits for rapid growth in sales and as it built new businesses. That patience may finally be wearing thin.
The average large-cap fund that holds Amazon has 1.4% of its assets in the stock, down 23% from this time last year, according to the latest available Lipper data.
There are 116 funds with more than $1 billion under management that have either reduced or sold all of their holdings in the Internet retailer over the past 12 months. They include such well-known names as Fidelity Contrafund, Washington Mutual Investors Fund, Touchstone Sands Select Growth fund and the T Rowe Price Growth fund.
Some investors and analysts said that such a drop in fund ownership - in a period when Amazon's shares have been climbing - suggests that large-cap managers increasingly see the company as over-valued, particularly at a time when it is spending tons of cash branching off into everything from selling its own smartphone to producing a Woody Allen TV series.
Reuters contacted the 25 mutual fund managers who sold the greatest number of Amazon shares over the last year, and none of them were willing to be quoted by name for this story.
One fund manager who sold out of his position in the company over the last six months said: "This has the potential to be a phenomenally profitable company, but the shares are rallying on no new news, in our opinion, so we thought we might as well step to the side for a while."
Text: David Randall, Reuters
Image: A view of the reception of Amazon Europe Holding Technologies in Luxembourg in this picture taken on November 20, 2012.
Images courtesy: Reuters