What Should Be Travelling Inside an Investor’s Portfolio: Priceline.com Inc (PCLN) and More

Page 2 of 2

The company has become a global name with over 82% of its revenue being generated outside U.S., mainly Europe. The company is now targeting the Asian market which is evident from its purchase of Agoda, an Asian hotel-booking site along with its alliance with CTrip, a Chinese travel service provider.

The company has been immensely successful with whatever it has done and I am equally optimistic about its success in Asia. The company has a robust balance sheet with a cash balance of over $5 billion and no debt. The company is currently trading a premium with a P/E ratio of 26.5 times. However, with a forward P/E of 19 times and a 5 yr expected PEG ratio of 1.2 the company has immense growth potential to support its valuation. In short, a good company to invest in.

Another site to get your bookings done

Expedia is the world’s second largest online travel agency with leading travel websites such as expedia.com, hotels.com, venere.com and carrentals.com. It has relationships with over 145,000 hotels in 100 countries. The company is currently focused on mobile and trying to make it a platform to reach customers for making online travel bookings.

It will be acquiring a 62% stake in Trivago, the European online travel search site. Trivago is already established in Europe and has a horizon of more than 619,000 hotels with 143 booking sites for comparing rates online. This acquisition will give Expedia an entry in the hotel meta-search business. Moreover, Expedia’s revenue will soon increase as it is going to proportionately share around 20 million monthly visitors at Trivago.

Expedia’s growth in Asia, where margin per booking is a lot lower than U.S has affected its bottom line. Moreover, it faces a lot of competition from emerging local companies such as Makemytrip and Ctrip in the Asian market. The company has majorly grown its revenue over the period, which has helped its stock price to double in last year, leaving very low upside potential. Investors who are holding the stock for over a year, it’s a good time to cash in your shares and I would recommend not to buy any fresh investments.

The article What Should Be Travelling Inside an Investor’s Portfolio originally appeared on Fool.com and is written by tarun bachhawat.

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

Page 2 of 2