Diamond Hill Cuts Amazon Stake Amid Caution on Valuation

Diamond Hill Capital Management Inc, managed by Ric Dillon, has trimmed its stake in Amazon.com, Inc. (AMZN). The hedge fund reduced its position by 307,695 shares.

This significant transaction marks a change in the fund's investment strategy regarding AMZN. Despite the reduction, Spark's AI Analyst views AMZN as an 'Outperform' stock due to improving profitability and returns, strong trend strength versus major moving averages, and AWS/AI acceleration.

However, Spark notes that negative TTM free cash flow and management's large CapEx plan may keep cash generation and margins volatile in the near term. The current valuation (P/E ~21.6) is considered fair rather than cheap.