New Trade: Long Priceline (PCLN) & Short Travelzoo (TZOO)

By: ispeculatornew
Date posted: 03.16.2017 (3:00 am) | Write a Comment  (0 Comments)

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Today I am opening my 10th trade of the year in what has so far been a good year. As is always the case, you can see past 2016 (and previous years) 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 Growth
PCLNPriceline Group Inc/The1767.9828.2420.4520.6616.474.62200.221.23217.0719.0224.87
TZOOTravelzoo Inc9.219.3621.67-3.19-9.2931.311.359.18-3.44N/A

Revenue growth for PCLN unsurprisingly has been very steady over the years while TZOO is not seeing much positive

 

Long Priceline (PCLN)

Priceline has been one of the most consistent stocks not only in the tech sector but in the overall market for over 10 years. It has been able to improve its core products but also make timely acquisitions to cover areas that it was lacking. Priceline is the clear leader in the online travel space and while I do expect to see TRIP gain ground at some point, there really is no one that can challenge PCLN giving me confidence that they will be able to maintain steady growth on top and bottom lines as more of the travel booking dollars move online.

Next earnings: May 3rd 2017


Short Travelzoo (TZOO)

Continues to be challenging for me to understand how Travelzoo (TZOO) could be trading at a comparable forward P/E to Priceline. Not only has the company displayed very little top or bottom line growth but I’m not seeing much in terms of product innovation in a fast changing environment. I personally see TZOO’s model in a similar way to what Groupon was built on which still works but is clearly not doing as well these days.

Next earnings: April 27th 2017

Disclaimer: Prior to opening this trade, I do not have a position on PCLN or TZOO
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