Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

More Long-term Growth Is Expected for Priceline.com Inc (PCLN)

Competition

Through Booking.com, the company continues to shift more of its focus into the domestic market, competing directly with Expedia Inc (NASDAQ:EXPE). Similar to Priceline.com, Expedia Inc (NASDAQ:EXPE) also had a solid start for 2013. Expedia is rolling out its Expedia Traveler Preference (ETP) program as expected, with over 25,000 hotels signed up and over half of those live in production. Expedia is taking a smart strategic route to continue its growth. The ETP program will allow Expedia Inc (NASDAQ:EXPE) to compete with the agency-model players while maintaining merchant margins. Expedia is pushing aggressively into Europe while Priceline.com is trying to expanding into the U.S. market.

Another competitor, Orbitz Worldwide, Inc. (NYSE:OWW), is also having a solid start for 2013 with accelerating growth for stayed room nights. The company continues to invest in 3 key areas: mobile, loyalty, and international market. Orbitz Worldwide, Inc. (NYSE:OWW), rolled out its Orbitz.com Rewards Loyalty program in the first quarter and enhanced its HotelClub initiative with expanded support for more currencies and languages to allow it to expand further into the international market.

Bottom line

With continuous buyback financed with convertible notes, Priceline.com Inc (NASDAQ:PCLN) is making a sounding capital allocation decision to leverage its investment-grade credit and to enhance shareholder value. Although there will be short-term operating margin compression due to higher spending to build its brand name and increase customer awareness, the company remains well-positioned globally. By continuing its penetration into the U.S. market, Priceline.com still has more room for upside potential.

The article More Long-term Growth Is Expected for Priceline.com originally appeared on Fool.com and is written by Nick Chiu.

Nick Chiu has no position in any stocks mentioned. The Motley Fool recommends Priceline.com. The Motley Fool owns shares of Priceline.com. Nick is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.