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Paul Mampilly is an American investor, former hedge fund manager and winner of the prestigious Templeton Foundation investment competition. Paul has been featured on CNBC, Fox Business News and Bloomberg TV. He is the founder of the popular investment newsletter Profits Unlimited, ... more

Amazon Is Going To Crush This Entire Group Of Companies

Date: Thursday, October 12, 2017 1:26 PM EDT

Amazon.com Inc. (Nasdaq: AMZN) is about to strike at a new target.

“It’s a matter of when, not if,” David Larsen told clients in a report last Thursday.

Larsen is an analyst at Leerink Partners, an elite boutique brokerage firm that’s an expert on healthcare stocks.

From my 20 years on Wall Street, I know that Leerink’s analysts are top-notch.

When they say something, you pay attention … which is exactly what many of you need to do now.

Because if Amazon enters this market, it would pose an immediate threat to many of your stocks.

These are popular, dividend-paying stocks that I’m certain many of you own.

And that’s terrible news for you and your portfolio.

See, here’s what happens when Amazon targets your stock…

First, they start going down.

Second, as the business that your stock controls gets “Amazoned,” it keeps going down.

In this case, it’s a business that’s seen as safe. It has many barriers to entry, according to one of the CEOs who’s being targeted.

However, an analyst at a consultancy believes otherwise.

“They are disruptive instantly if they do it differently,” says Linda Cahn at Pharmacy Benefit Consultants.

So, what’s the business that Amazon is getting ready to disrupt?

Ripe to Be Amazoned

It’s the prescription drug market.

You may not have known this, but before you get your drugs from your local drugstore, they go through quite a wild ride.

Just take a look at this infographic to see what I’m talking about:

(Source: USA Today)

This convoluted pipeline enriches middlemen. It also makes drugs more expensive by as much as 36%.

This is a big deal. Total prescription drug spending in the U.S. was $457 billion in 2015. And it’s set to skyrocket to $610 billion by 2021, according to recent research.

The current system is a gold mine for the middlemen — companies like Walgreens Boots Alliance Inc. (Nasdaq: WBA), CVS Health Corp. (NYSE: CVS) and Express Scripts Holding Co. (Nasdaq: ESRX) get rich off of us.

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