This weekend was another struggle. For some reason, I do not see many great trading opportunities these days and I came very close to not selecting a new trade today. Why? I’ve set myself a maximum of 7 trades open at once but it’s very possible that on some occasions I will be unable to see good opportunities (at that point, I will be posting a in depth post about my trading which I’ve hinted in the Tech Stocks Newsletter). Fortunately, after looking through the numbers a bit deeper, I did find a good trading opportunity. I’d invite you to take a look at the numbers for both of these stocks:
Ticker Name Price EPS PE Ratio PE Next Year Return YTD Sales Growth Analyst rating Book Value Beta
EBAY eBay Inc 39.44 2.5 21.58 14.59 30.20 27.25 4.35 14.49 1.17
IACI IAC/InterActiveCorp 49.5 2.05 23.69 15.35 17.64 25.82 4.13 22.84 0.97
I wrote a detailed post recently about $EBAY and why I do believe there is a lot of medium to long term upside for eBay, I simply believe that Paypal will be able to keep up its strong momentum and growth going forward. I do think that online advertising growth will continue to be a bit difficult in these tough economic times which will certainly make life easier for a company like eBay compared to IACI. The basic idea behind this trade is the fact that both of these companies have been trading at comparable P/E ratios and have achieved comparable revenues growth. Which of these two is most likely to keep up the growth going forward? I’d say eBay, without much of a doubt.
There is no doubt, I’ve had a difficult time getting a good feel on IACI. The company has been a much stronger player than I had anticipated in my annual Tech Stock Power Rankings. The returns has not been overwhelming but remains stronger than I had expected. Part of the issue for me is that IACI continues to be focused on so many different activities that it’s difficult to get a great feel for it. I still consider IACI to be very dependent on the advertising market which has remained fairly weak. In the end, I simply think that the match between these two is very solid and makes for a promising trade.
Disclosure: No positions on eBay ($EBAY) or IAC Interactive ($IACI), this trade will be opened on Monday morning