As regular readers know, one of my favourite areas to invest in is online travel. There are many reasons of course but generally the idea behind is that it is a competitive field with a few listed companies. Ideally, Kayak would also be a listed company (maybe eventually) but for now, Priceline, Expedia and Orbitz do provide opportunities.
Right now, it certainly looks like Priceline is trading cheap compared to Expedia. It has a higher P/E ratio but compared to growth differences, I personally think that difference should be higher. As well, Expedia has been running all kinds of promotions to try to catch up, unsucessfully so far it seems.
Just take a look at the recent sales growth for both companies, it is not even close:
Ticker Name Shares Jan 14 2014 Price Jan 14 2014 Values
OMC Omnicom Group Inc 29 $73.91 $2,217.30
MSFT Microsoft Corp 71 $35.78 $2,576.16
JCI Johnson Controls Inc 39 $51.92 $2,076.80
PEP PepsiCo Inc/NC 27 $82.37 $2,306.36
ETN Eaton Corp 31 $75.70 $2,346.70
DOV Dover Corp 23 $95.42 $2,290.08
ITW Illinois Tool Works Inc 27 $82.23 $2,302.44
XLNX Xilinx Inc 37 $46.05 $1,703.85
SJM JM Smucker Co/The 19 $99.34 $1,887.46
BLK BlackRock Inc 10 $310.52 $3,415.72
TROW T Rowe Price Group Inc 28 $83.19 $2,412.51
OXY Occidental Petroleum Corp 21 $92.31 $2,030.82
COP ConocoPhillips 25 $68.32 $1,708
XOM Exxon Mobil Corp 19 $99.12 $1,883.28
ADI Analog Devices Inc 43 $49.71 $2,187.24
HAS Hasbro Inc 31 $52.31 $1,621.61
MAT Mattel Inc 42 $44.40 $1,909.20
INTC Intel Corp 53 $26.51 $1,405.03
AFL Aflac 28 $64.70 $1,876.30
BAX Baxter International 23 $69.66 $1,671.84
IVZ Invesco Ltd 67 $35.22 $2,359.74
VWO Vanguard FTSE Emerging Markets 43 $39.81 $1,711.83
BND Vanguard Total Bond Market 21 $80.57 $1,691.97
Cash $75.44
USDP $47,868.63
SPX 13.80378067 $3,300.53 $47,593.77
Then, you can also take a look at traffic charts from Compete, again, Priceline clearly dominates
If you take a look at both stock charts, you will of course notice that Priceline has been the overperformer but I do think that it will remain that way and that Priceline will continue to rise quickly in the the coming year. As the economy continues to go through difficult times, Priceline, known as the cheaper way to book travel to most online travellers should be able to continue to gain ground on its competitors.
For your info, I was asked in yesterday’s post to give an idea of the chart that I use to find trade ideas, I will be writing a post about that tomorrow morning.
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Opening prices:
PCLN: 216.06
EXPE: 23.84
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