OTA Stocks – Giving credit where credit is due

Today, following 3Q earnings reports for many industry players, I would like to take a quick look at the top OTA stocks.

In the chart above, the blue line represents the performance of Expedia’s stock (EXPE).  Expedia is trading at $59.25 today, with a market cap of $8.08b.   On October 30, the company reported 3Q results which exceeded expectations and stated that the company was on track for 2014.  Expedia’s 2014 projections include calling for 15% bookings, 13% revenue and 17% EBITDA growth. 

The red line is market darling, Priceline (PCLN).  Priceline has had steady growth year to date.  It trades at an astounding $1,058.25 per share and has a market cap of $52.27b.   The company releases its 3Q numbers tomorrow.

The green line is Orbitz (OWW).  Orbitz is trading today at $7.25 and at the time of writing, has a market cap of $793.5m.  This week OWW took a bit of a beating due to lower than projected
earnings, but as always in the stock market, it is important to maintain
the longer term view.

Over the course of the last six months, Orbitz stock has outperformed its peers in sheer growth. 

On the same day of Orbitz’ earnings announcements and the corresponding drop in stock price, the Dow was down and Hertz also saw a 10.5% decline in its stock, when it revealed in its third-quarter earnings report that Simply Wheelz, which
had bought Hertz’s Advantage brand, had filed for bankruptcy and
therefore would be unlikely to pay Hertz properly for the acquisition.  For the quarter, the rental-car giant posted strong revenue gains and better earnings than expected. 

So when you see headlines about a stock tanking, make sure to put those headlines in perspective and give credit where credit is due.

Keep your eye focused on fundamentals.  There is room for more than one winner in this marketplace.