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Priceline And Expedia's Stock Outlook Playing Out As Expected

On January 1, I identified Priceline Group (PCLN) as one of my Value of the Year selections, and shortly thereafter I explained that short-term losses in VoY selections is normal, and has occurred in every year since I started the annual series. While I recognize the FOREX risks associated with Priceline, its 20% stock losses over the last six months and continued revenue growth make its valuation very attractive relative to other internet companies. Albeit, with Expedia (EXPE) now turning lower behind a deceleration in revenue growth and a reduction in hotel margins (as expected), it might now be time for Priceline to finally reverse and trade higher.

As you can see, Expedia and Priceline have both traded higher over the last five years, but have hardly traded along the same path. In late-2011, Priceline traded higher while Expedia went lower. Other large differences in trend can be identified… Read More …