The year started off amazingly well as 3 of the 4 first trades that I opened closed out early, all making significant profits but since then, things have calmed down quite a bit. I did update the stock picks results page and hopefully I can keep seeing more early exits but these results are more “typical”. As much as I’d like for stocks that I consider undervalued to rise days after my picks, it is likely to take more time.
I would also like to invite you to see how I calculate my returns for long & short tech stocks.
Today I had a more difficult time finding the right stock pick and even did contemplate shorting Groupon (GRPN) but as I’ve explained in the tech stocks newsletter (join now if you have not done already), I’m trying to resist that for now. So today I open a 5th trade:)
Let’s start off by looking at the numbers:
Ticker Name Price EPS PE Ratio PE Next Year Return YTD Sales Growth Analyst rating Book Value Beta
IACI IAC/InterActiveCorp 45.8 2.05 23.59 14.67 8.52 25.82 4 23.22 0.98
TZOO Travelzoo Inc 28.16 0.2 18.54 15.31 7.85 31.53 4.33 2.18 1.58
Long Travelzoo (TZOO)
Travelzoo made the top 10 in my 2012 Tech Stock Power Rankings in good part because the company continues to be very targeted towards its goal of high growth. There is certainly less hype than there was a year ago when the stock made it to $100 or so… Now the stock is down over 70% but I am a believer as the financials continue to look good.
Short IAC Interactive (IACI)
IAC Interactive has been able to grow much faster than I would have expected thanks to many of its segments, even including search. Who knew people used Ask.com to search the web:) On a more serious note though, I do not expect that performance to keep up. Even if it did, keeping up with the very impressive Travelzoo seems very unlikely which presents a great trade opportunity since they trade at comparable P/E ratios. IAC will start paying a dividend which is great for dividend investors but does not indicate that growth opportunities abound.
Disclosure: No positions on Travelzoo (TZOO) and IAC Interactive (IACI) but this trade will be opened on Monday morning