Post a CommentToday I am opening my 13th trade of the year between 2 stocks that trade at similar forward P/E ratios. It is the exact same trade that I closed earlier this case which might look strange but that is one reason why I do use stop losses. It gives me the opportunity to revisit my options and I ended up finding that my best trade opportunity was one that I had just closed. 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:
| Ticker | Name | Price | PE Ratio | PE Next Year | Return YTD | Sales Growth | Analyst rating | Book Value | Beta | Revenue/Share | Sales 5Y Avg Growth | EPS 5Y Avg Growth |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TRIP | TripAdvisor Inc | 65.67 | 64.22 | 29.51 | -22.46 | 19.74 | 3.07 | 10.05 | 1.47 | 10.36 | 19.33 | -6.2 |
| YELP | Yelp Inc | 25.31 | N/A | 30.64 | -8.61 | 45.6 | 3.47 | 9.17 | 1.22 | 7.36 | 57.8 | -133.32 |
This chart certainly looks terrible for TRIP
But this one from Google Trends probably looks worse for YELP:
Long Tripadvisor (TRIP)
I have obviously been a big believer in TRIP and in many ways that has been a very painful position as the continues to struggle being down 22% so far this year. There are many different stories about what’s happening and I’ve obviously been paying very close attention as it is one of my 3 bigger tech stock positions (with FB and AAPL). As TRIP continues to roll out its Instant Booking platform, it has gained steam in terms of having major partners sign up but that has been translating into shorter term challenges as it sends business to its own less optimized, less profitable solution rather than getting compensated by the likes of EXPE and PCLN. In the end, TRIP continues to grow its community and is adapting better than competitors to mobile so I do remain very confident in its long term future.
Next earnings: August 4th 2016
Short Yelp (YELP)
In many ways, YELP has been unimpressive in my opinion. When you look at recent trends in revenues and other metrics, you could say that TRIP and YELP are both suffering but I think the explanations and overall strategy of TRIP makes a lot more sense. YELP is an extremely competitive space facing the likes of Priceline’s (PCLN) Open Table, AngieList, Google with other major players like Facebook and Amazon looking to also compete in the local listings space. YELP has struggled to adapt to mobile and in a world that is increasingly going mobile only, that is obviously a very problem. I did get burned being short YELP recently and that is a risk with any short position going into earnings season but I do feel confident that it will not happen again with YELP.
Next earnings: July 27th 2016
