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This Week's 5 Smartest Stock Moves

If you're feeling good about the market, you're not alone. Take my hand as we go over some of this week's more uplifting headlines.

1. Amazon's Prime objective
(NASDAQ: AMZN  ) announced this week that it's raising the minimum order size of its "FREE Super Saver Shipping" option. Customers will have to spend $35 -- up from $25 -- on the millions of Amazon-warehoused goods to receive free delivery within three to five business days.

This is Amazon's first increase in a decade, but it's a smart move. No one even comes close to Amazon these days, so what does it have to lose by asking customers to fill up their virtual shopping carts a bit more on the way out? More importantly, this will give shoppers one more reason to join Amazon Prime, the loyalty shopping club where millions of customers pay $79 a year for unlimited free two-day shipping.

Amazon knows that the moment someone signs up for Amazon Prime, they will place even more orders through the leading online platform.

2. Ford tough
Ford (NYSE: F  ) is motoring these days.

The popular automaker -- and I'm not just saying that as a shareholder and satisfied Ford Flex driver -- posted better-than-expected quarterly results on Thursday. Revenue climbed 12% to $36 billion, and operating earnings rose to $0.45 a share. Analysts were betting on a decline.

Ford's record results shouldn't come as a surprise: It has rattled off 17 consecutive profitable quarters, and consumer demand for new cars is benefiting the entire industry.

3. Nothing but Netflix
The market initially liked Netflix's (NASDAQ: NFLX  ) quarterly report, but it fell out of love after Carl Icahn sold more than half of his stake and CEO Reed Hastings subtly suggested the stock may be overvalued.

Hastings closed out his letter to shareholders discussing the blowout quarter by reminding investors how Netflix was Nasdaq's biggest winner in 2003, posting an even bigger gain that it has this year. Despite solid growth in its fundamentals the following year the stock still went on to shed more than half of its value. He didn't explicitly say that the stock could be headed for a correction -- even a visionary CEO like Hastings doesn't know that -- but the implication was certainly there.

More than a few shareholders probably didn't want to hear that. They certainly didn't want to hear Hastings say that. However, you have to admire his courage for the blunt assessment. An interesting point that wasn't said but is worth noting is that as pricey as Netflix shares may have seemed at the end of 2003 the stock went to appreciate sixfold over the next 10 years.

4. Tesla aims broader 
Tesla Motors  (NASDAQ: TSLA  ) has been one of this year's biggest winners, but a popular knock is that it only makes cars for the upper crust. Sooner or later, it's going to run out of well-to-do drivers who can buy its $70,000 cars. 

CEO Elon Musk has pointed to 2016 as the goal to have a more economical car in the market, following next year's rollout of the Model X crossover SUV. Targets that far out have a way of getting delayed, but at a recent Tesla event in Germany, Musk revealed that a prototype for the Model E could be out in 12 to 15 months.

Tesla's stock isn't cheap, but the company is closer to the product that could make its electric cars a mainstream smash.

5. Icahn checks out 
Icahn wasn't just selling half of his stake in Netflix this week. He also successfully persuaded the world's largest consumer-tech company to spend more of its ample cash on a buyback. 

In a quieter transaction, Icahn squared away a deal for WebMD Health (NASDAQ: WBMD  ) to buy back his stake in the company. WebMD Health is the big winner here. It already had an existing share-repurchase plan in place, and now it gets to tack on to those efforts by snapping up Icahn's stake at a market discount.

Icahn would've taken a hit if he had dumped his sizable stake in the open market, so taking $177 million for his 5.5 million shares directly through WebMD Health was a win-win.

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S&P 500 2,159.93 13.83 0.64%
NASD 5,305.71 48.22 0.92%

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9/27/2016 4:00 PM
AMZN $816.11 Up +16.95 +2.12% CAPS Rating: ****
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