Cliff Asness Has Been Buying Up Kayak

It’s also appropriate to compare these two stocks to Expedia Inc (NASDAQ:EXPE) and Tripadvisor Inc (NASDAQ:TRIP). High growth is priced in to these companies as well, as their respective trailing earnings multiples are 26 and 34. Note that these are significant discounts to Kayak, and in fact are significant discounts to where Kayak was trading before Priceline offered a hefty premium for the company. Revenue has been up strongly at both of these companies; it’s challenging to determine how Expedia’s earnings have changed as it spun out Tripadvisor about a year ago. Chinese tour company Ctrip.com International, Ltd. (NASDAQ:CTRP) is another possible comparable company, though its financial position is a little more uncertain.

We’re not sure that investors have much room to make gains on an investment in Kayak, unless the transaction price goes up (or if there turns out to be some sort of arbitrage opportunity with Priceline shares). While it’s impressive that AQR has taken such a large stake, it looks likely to us that these shares were bought before (or at least mostly before) the stock price crossed $40 and so unless there is a pullback in the price for some reason (or more news emerges) it’s probably not wise to follow Asness here.

Disclosure: I do not own any stocks mentioned in this article.