New Trade: Long Priceline ($PCLN) & Short XO Group ($XOXO)

By: ispeculatornew
Date posted: 07.23.2012 (5:00 am) | Write a Comment  (0 Comments)

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Good Monday morning! After closing 3 trades last week, I will be closing another one today. I had initiated a long position on eBay on May 7th and that paid off big last week after eBay announced more solid earnings powered by its Paypal and its mobile business once more.  eBay had a big day which helped take the trade past my “stop win”, it will be closed this morning but currently stands at +21,57%:

Making my picks turned out to be a challenge this week as there were a few different opportunities but also several stocks that will be reporting earnings this week (including Facebook-FB). I was also tempted to take a long position in Yahoo but I’ll need a bit more time before doing so to decide if Miss Mayer’s presence is enough to justify jumping back on the ship. Today, I am opening a new position on two stocks that I traded quite a bit in 2011 but not so much this year. Let’s get right to it and look at the numbers:

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Long Priceline ($PCLN)

Priceline has been a remarkable story for about 10 years now. The company as an amazingly strong brand which has helped it fend off competitors such as TripAdvisor, Kayak, etc. The fact that it offers a slightly different offering and has a lot of power with hotels and other travel related companies has obviously helped a lot in making Priceline come up with such strong growth over and over and over. I remain a believer and think the stock remains priced on the low end of what it could/should be.




Short XO Group ($XOXO)

The company formerly known as The Knot is still all about weddings and very much a company that depends on advertising so it’s no surprise that this weak economy has made things more difficult for XOXO. Growth has been reasonable but not anywhere near what would justify a forward P/E above 20 in my opinion, especially when I consider Priceline’s valuation.




Disclosure: No positions on Priceline (PCLN) or XO Group (XOXO), this trade will be opened on Monday morning

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