Q4 Stock Pick #2: Ctrip(CTRP) vs Expedia(EXPE)

By: ispeculatornew
Date posted: 10.07.2009 (5:00 am) | Write a Comment  (3 Comments)

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ctrpIn my start of year 4 stock picks, my biggest success by very far was Baidu who had suffered terribly in 2008 for numerous reasons. No need to tell you how happy I’ve been with that pick with BIDU up about 200% this year. There are still many possibilities in China and with the emergence of the middle class and China’s new open mind, travel is increasingly becomming a major economic engine. I’ve been looking into a few different online travel companies and feel like Ctrip.com (CTRP) is one of the major potential stories and perhaps the best pick on my list for Q4 and beyond.

Ctrip is already up in 2009…

To be fair, the stock has already gained a lot in 2009 rising almost 200% as well. But I do think it still has a lot of upsize, especially compared with some slower growing American companies such as Orbitz and Expedia.

You can take a look at Ctrip’s financials, they are, as you would expect, very impressive. The company is the leader in a market that is currently going through very high growth.

expe

Expedia has tough times ahead

Compare that with Expedia(EXPE) which is in a much more competitive US market and has been struggling to achieve any growth, as you can see in their financials here. As well, while the Chinese are certainly not experiencing economic growth like the one of years past, there is no doubt that the travel industry is doing better than it is in the US (comscore estimates numbers will be down 5% this year from 2008). Expedia in fact got so desperate that it dropped its fees drastically a few months ago in order to stop the market share losses to Priceline, Travelzoo and others.

Expedia was formerly a part of IAC Interactive, a company I have been no fan of, and while they are now separate entities, I believe Expedia will be just one of the many franchises  that were slowly mismanaged and become obsolete…

What are your thoughts on this trade? Think Ctrip is the next Baidu?:) Is it the stock pick for Q4?

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3 Comments

  1. Comment by IS — October 19, 2009 @ 2:44 pm

    Opening prices on Oct 7:

    CTRP: 60.64
    EXPE: 24.00

  2. Comment by IS — November 13, 2009 @ 10:01 am

    Trade is closed:

    CTRP: 69.07
    EXPE: 23.70

    return : 21.65%

  3. […] winning trade. Just a few days ago, I closed out a trade that involved a play on travel, Ctrip vs Expedia. There are two other names that I follow closely and I am now picking them for my next trade. It is […]

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