Today I am opening my 5th trade of the year between between 2 names that I have traded quite a bit over the years. As is always the case, you can see past 2016 (and previous years) trades here:
Let’s start off by looking at the numbers:
|Ticker||Name||Price||PE Ratio||PE Next Year||Return YTD||Sales Growth||Analyst rating||Book Value||Beta||Revenue/Share||Sales 5Y Avg Growth||EPS 5Y Avg Growth|
|PCLN||Priceline Group Inc/The||1575.13||27.06||21.56||9.29||9.26||4.64||199.32||1.25||181.08||20.75||9.49|
Long Priceline (PCLN)
For this trade, I wasn’t sure if I’d go long Priceline (PCLN) or Expedia (EXPE). Both have been solid performers and trade at comparable valuations but I do think a clear difference is that Priceline has been so steady over more than a decade. One truly impressive aspect has been its ability to generate both top and bottom line growth so consistently over time. That reduces the odds of a miss that could hurt this trade. For that reason, I’m going with PCLN even though it has (slightly) slower growth in recent quarters.
Next earnings: February 15th
Short Twitter (TWTR)
I have started writing a post about Twitter but the short story is that the company has been incredibly slow in improving its product and that is a big part of why its user growth has stalled. The company could be taken over of course but I think that’s a risk that’s worth it in these circumstances given its current valuation and growth perspectives. Twitter continues to be a great product to use and perhaps the application I spent most time on personally but it’s been unable to grow and I believe the issue is mostly around product execution rather than having a product that’s difficult to use or understand.
Next earnings: February 9th 2016