New Trade: Long TripAdvisor ($TRIP) & Short OpenTable ($OPEN)

By: ispeculatornew
Date posted: 06.17.2013 (3:00 am) | Write a Comment  (0 Comments)

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This morning I sent out a newsletter to the members of my tech stock focused mailing list about companies that are playing the long game (it’s one of the key things I look for when making speculative longer term investments). I spent a lot of time thinking about it this weekend and today’s post fits very well. If you’d like to get 1-2 emails per month with additional thoughts on the tech stocks that I follow, be sure to join the mailing list here:

Today’s new trade is one that I probably would never have considered until very recently. OpenTable is the type of stock that is incredibly scary to short but it does seem to have lost some of its momentum and feels like a good play at its current levels. Before going further here are the numbers on these two companies:

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And the quarterly Y/y revenues growth:

TRIP Revenue Quarterly YoY Growth Chart

TRIP Revenue Quarterly YoY Growth data by YCharts

Long TripAdvisor (TRIP)

TripAdvisor was not at the top of my top social web stocks earlier this year but I’ve always held it in high regards.  The company is quite possibly the best positioned travel website out there which is saying something when you consider rivals such as Priceline (PCLN), Travelzoo (TZOO) and others. When I look at the numbers above, I see two comparable stocks but TRIP just seems more attractive no matter what metric you’re focusing on.


Next earnings release: July 24

Short OpenTable (OPEN)

OpenTable is a stock I’ve been very hesitant to trade. I do know the product very well and like many of you I’m sure, am a regular user. It’s a great product and I do think the company will do well over time. That being said, I don’t see anything that would justify its current P/E ratio that is almost identical to TripAdvisor. The company will struggle to keep up strong double digit growth and I do think it’s a stock that has significant downside at its current level.


Next earnings release: August 2nd

Disclaimer: No position on either TripAdvisor (TRIP) or OpenTable (OPEN)

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