Investors should consider the Amazon effect on their stock picking homework as the company is a "death star" that could upset any industry it chooses, said CNBC's Jim Cramer on Monday.
Amazon could disrupt shipping and delivery companies such as FedEx and GrubHub as it expands its own transportation business, he said. The tech giant has already beaten off Walgreen, who faces difficulties at the store and pharmacy, and CVS, which maintains its health strategy with Aetna, Cramer said.
Amazon has partnered with JP Morgan Chase and Berkshire Hathaway on a project called Haven to cut healthcare costs.
"They could theoretically have the same kind of bargaining power as Medicare or the [U.S. Department of Veterans Affairs]." Health care seems to be completely vulnerable, "Cramer said.
However, there are several companies that have managed to protect their market share and not bow to the rumors that Amazon is coming for their industry, Cramer said. On Monday, Best Buy promoted Corie Barry, who was responsible for the retailer's home service program, to outsource Amazon from the CFO to the CEO. Autozone maintained its place in the auto parts industry when it came under pressure from Amazon last year.
Home Depot, Lowe's and Cisco have all fought Amazon, he added. Industries where companies do not provide practical service or work for a customer are vulnerable, he said.
"The next time you think about buying a stock, you have to ask yourself a question – add it to your homework checklist: could Amazon destroy the company's margins, and if so, lower your expectations", said Cramer.
Disclosure: Cramer's charitable trust owns shares in Amazon.com and Home Depot.
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