Google Inc (GOOG), Priceline.com Inc (PCLN): 3 Buys From Lone Pine Capital Holdings

Focusing on smartphone growth and international business

Priceline.com Inc (NASDAQ:PCLN) acquired Kayak for $1.8 billion on May 21, 2013 to expand its offerings to smartphone users. According to a Trefis report, smartphone users around the globe are expected to rise to 1.6 billion in 2014 from 1 billion in 2012. The deal will allow Priceline to expand its offerings to smartphone users for the first time. It will allow the customers to easily compare the information from hundreds of travel websites on mobile devices. Through this initiative, the gross profit is expected to rise by 6% annually from 2013 to 2015. The total revenue will rise this year to $6.6 billion from $5.3 billion last year.

The company’s first-quarter results were mainly driven by international hotel bookings: with the revenue from this segment reaching $7.8 billion, e-commerce transactions are growing at an annual rate of 19% in Asia and Europe. Looking at this growth rate, Priceline.com Inc (NASDAQ:PCLN) is now focusing on these continents. This is a good initiative, as in these markets there are many small and family-run hotel businesses that have lesser marketing budgets. Also, many of them aren’t available on the Internet. Priceline aims at increasing the web presence of these small vendors.

Eventually, its international hotel booking revenue is expected to increase to $8.44 billion in the second quarter of 2013. This will be followed by $9.16 billion in the third quarter.

Conclusion:

Priceline.com Inc (NASDAQ:PCLN)’s international business and offering services to smartphone users will help the company to increase its revenue. Dollar General’s expansion move and the addition of tobacco will help the company generate additional revenue. Google Inc (NASDAQ:GOOG)’s mobile advertisements and an additional source of revenue from the Youtube pilot program will be beneficial for the company.

Considering the potential of these companies, I recommend buying all three.

Madhu Dube has no position in any stocks mentioned. The Motley Fool recommends Google and Priceline.com. The Motley Fool owns shares of Google and Priceline.com Inc (NASDAQ:PCLN). Madhu is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article 3 Buys From Lone Pine Capital Holdings originally appeared on Fool.com and is written by Madhu Dube.

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