Don't be fooled

TripAdvisor has an inherently different business model, acting more as a social review site, something akin to Yelp for travel destinations, rather than a conventional travel booking site like Expedia. Even so, I still cannot find enough conviction to recommend investing in the stock. A couple of top hedge funds were selling off their stakes during the fourth quarter; both SAC Capital (check out SAC's new picks) and Maverick Capital sold off 60% of their shares (see all hedge funds owning TripAdvisor). The stock even appears expensive from a takeover perspective. The Priceline buyout of Kayak is at a 4.88 EV/Sales multiple, but such a multiple on TripAdvisor's TTM revenues would suggest the company is overvalued by upwards of 65%.

The article Time To Get Aboard TripAdvisor? originally appeared on Fool.com and is written by Marshall Hargrave.

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