New Trade: Long Facebook ($FB) & Short Travelzoo ($TZOO)

By: ispeculatornew
Date posted: 03.02.2016 (3:00 am) | Write a Comment  (4 Comments)

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Today I am opening my 7th trade of the year as I will be trading two stocks trading at similar forward P/E ratios. As is always the case you can see the existing live 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
FBFacebook Inc109.8283.5325.982.1643.824.7415.540.996.451.72N/A
TZOOTravelzoo Inc7.959.2431.78-6.21-0.2531.451.059.633.17-20.04

Travelzoo did have a one off strong growth # in its latest # but even that pales compares to what Facebook has been able to achieve:

FB_TZOO_chart

Long Facebook (FB)

Facebook is my biggest single stock position and I continue to be a big believer in the stock for many different reasons. It has been managed extremely well wih a long term focus that put its focus on users and products. That has resulted in building an empire that is quickly taking a significant share of online ad budgets as it continues to build its platform. I do expect growth to remain fairly staeady (a bit downward given its size) over the next few years as it starts putting more efforts into monetizing its messenging properties.

FB_chart

 

Next earnings: April 20th 2016

Short Travelzoo (TZOO)

In many ways, Travelzoo looks like it has failed to adapt to the new internet. It has not built on top of a community or even a very strong brand. Rather, it relies on a very big database (mailing list) of users to which it sends out daily/weekly deals. The problem of course is that it makes growth very challenging and the company faces competition from the likes of Groupon but also smaller specialized sites that squeeze margins. For that reason, you will not be surprised to hear that the growth has been unimpressive in recent times:

TZOO_chart

Next earnings: April 14th

Disclaimer: This trade on AAPL-EBAY will be done on today’s opening, I do have an existing Apple position 
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4 Comments

  1. Comment by Ken — March 2, 2016 @ 11:13 am

    TZOO is illiquid in my book – it used to be better. With the size I trade I would move the market too much just getting in and out.

  2. Comment by IS — March 4, 2016 @ 9:16 am

    @Ken – I def understand what you mean. Among the stocks I follow, I think there are 6 I can’t really trade or short for such reasons… TZOO is getting very close to joining that group.

  3. Comment by Ken — March 4, 2016 @ 11:47 am

    On other topics:

    1. Your site loads very slowly, in fact, slower than any site I access.
    2. Please consider adding to your watchlist:
    VNTV,VRSN,and MKTX.
    3. I don’t receive an email when you make a new post, even though I’m on the list.

    Thanks.

  4. Comment by IS — March 10, 2016 @ 8:34 pm

    1-Could not agree more, it’s a major issue, I’ve tried fixing in many different ways and even had a consultant help out.. it’s a problem with the database, I will get it fixed but it could take a little longer:(
    2-Will do yes, always appreciate those ideas Ken
    3-I’m pretty sure those problems are related to the first point, would posting my new posts to Twitter or somewhere else help in the meantime?

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