New Trade: Long Priceline ($PCLN) & Short IAC Interactive ($IACI)

By: ispeculatornew
Date posted: 01.13.2015 (3:00 am) | Write a Comment  (2 Comments)

      Post a Comment

Things are looking better than even 48 hours ago as the AOL rumours seem to be calming down so my 2 current trades are basically flat. Hopefully the recovery keeps up. Today, I’m opening a new trade on two of the “older” stocks among the tech stocks that I follow, I’ve had good success trading both in the past so hopefully this will keep up.

You can see my long & short trades here:

http://www.intelligentspeculator.net/livetrades

Let’s start off by looking at the numbers:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg GrowthSales 5Y Avg GrowthEPS 5Y Avg Growth
IACIIAC/InterActiveCorp60.4731.9618.62-0.537.934.2923.571.0936.2119.07141.49N/AN/A
PCLNPriceline Group Inc/The1039.9823.3416.9-8.7929.134.62166.821.23133.431.5130.83N/AN/A

Here is a chart that I always like considering, especially for 2 stocks that are trading at very comparable P/E ratios (in fact IACI is trading at a more expensive forward P/E):

ycharts_chart (2)

 

$PCLNLong Priceline (PCLN)

As much as a believer as I am in TripAdvisor as the top online travel play, there is little doubt that the past 10 years has been all about Priceline. Thanks to an incredible focus on offering an incredible service, and a dedication to its core product, Priceline has been one of the best performing stocks out there for a decade. I continue to believe it is a strong pick at these levels and that limited moves such as buying Kayak are the right ones to keep up the growth. I would not say that Priceline is very cheap at these levels but I think it’s a great play against IAC when you compare they trade at comparable P/E ratios despite vastly different growth in recent years. I do expect that trend to continue.

 

ycharts_chart

Next earnings release: February 20th 2015

$IACIShort IAC Interactive (IACI)

IAC Interactive is an interesting “old style” internet company in a way similar to AOL and Yahoo. I do think hey have several very interesting properties such as TheDailyBeast & Vimeo but in the end it’s not a model I believe in. I’d much rather hold a company whose sole focus is online travel booking and while Priceline has done well over the years and has been very good at spinning out some of the bigger, better performing assets, that is not enough for me to justify IACI’s current valuation, especially when compared with Priceline.

ycharts_chart (1)

 

Next earnings release: February 5th 2015

Disclaimer: No positions on either IACI or PCLN but I will initiate this trade on the open today

If you liked this post, you can consider subscribing to our free newsletters here


2 Comments

  1. Comment by Ken — January 13, 2015 @ 7:31 am

    On IACI you wrote, “it’s not a model I’m not a believer in.” I think you meant to leave out the 2nd not.

  2. Comment by Johan Lindén — January 19, 2015 @ 10:13 pm

    Nice mobile browsing interface you got.
    I wonder what you think of following up this sector and your thoughts and this article?
    http://wire.kapitall.com/investment-idea/gopro-ipo-wearables-component-suppliers/

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.