New Trade: Long Expedia (EXPE) & Short Travelzoo (TZOO)

By: ispeculatornew
Date posted: 06.02.2014 (3:00 am) | Write a Comment  (0 Comments)

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The past week was a good one in terms of long & short trades and I’m almost back to the same returns I had before that whole Rackspace (RAX) fiasco. Just to clarify something since I did get a few questions. I generally state my returns for this portfolio in terms of “average return” per trade. This is very different from “portfolio return”. Why? Let’s look at some numbers:

-Average trade return this year: 9.21%
-#Trades: 14 (excluding today’s)

This means that my turnover so far this year is 2. So the portfolio return is actually:


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As I’ve mentioned many times, this is a return gross of fees. The main fees involved are the borrow costs (net of interest on cash) and can be up to 1-2% on average per year.

Back to today’s business though. I decided to go back to one of my travel plays today: long Expedia (EXPE) and short Travelzoo (TZOO). take a look at the main numbers here:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg Growth
EXPEExpedia Inc73.331.0916.35.2518.383.8515.371.0735.3713.81
TZOOTravelzoo Inc19.2518.4216.67-9.294.673.672.060.7210.3612.53

EXPE Revenue (Quarterly YoY Growth) Chart

EXPE Revenue (Quarterly YoY Growth) data by YCharts

$EXPELong Expedia (EXPE)

I was very skeptical of Expedia following its spin-off of Tripadvisor but it does look like the company will be more than fine without its more social property. Expedia has a very strong brand, great partnerships and is as relevant as ever for booking travel. I do think it’s a good value at these levels, especially when you compare it with a company such as TZOO.


Next earnings release: July 31st 2014

$TZOOShort Travelzoo (TZOO)

Travelzoo is a company that does have an interesting business model but those “offer types” or Groupon for Travel have lost a lot of appear in the most recent years and I just don’t think the rest of the business has been able to compensate enough.

ycharts_chart (1)

Next earnings release: July 18th 2014

Disclaimer: No positions

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