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Walter Price, a portfolio manager at Allianz Global was a
guest on CNBC's Squawk On The Street on Friday to discuss
's fourth quarter results which consisted of a large earnings miss.
Related Link:
Amazon Had Its Biggest Profit Ever, But Is Earnings Miss A Sign Of Future Struggles?
According to Price, Amazon may have had "too much of a good thing" in the Christmas quarter. Specifically, the company recorded "very good" orders for its own business in addition to its third party business.
"I think they basically decided to absorb the higher cost to keep the customer happy and that's why their earnings were disappointing."
Price continued that the investment community is looking towards Amazon to demonstrate improvements on the margin front, especially at a time when the Street's expectations on margins were "too optimistic."
Price noted that he believes Amazon is on the right track to improve its margins over the long-term. As such, the company's fourth quarter print and subsequent decline in its stock should be seen as a "small setback and not a reason to dump the stock."
"The long term outlook continues to be very good for Amazon," the investment pro argued.
Despite the optimistic long-term view on Amazon's stock, Price noted that his firm "cut back a little bit" on its holdings ahead of the earnings print. He also added that his firm "isn't ready to buy back that position yet" but did suggest to investors who don't already hold a position to be buyers on the weakness.
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