Stockchase DiscoverExpediaEXPEBUYJun 07, 2022

AI agents are the real concern to a company like this. 200-day MA still moving higher. Using AI to improve platform. Has performed a bit better than BKNG.

They have all the best platforms out there. Leisure travel is really growing although the business travel part hasn't rebounded from Covid levels. Earnings growth is still very strong and continues to go higher.

AI fears moved stock lower, but it's recovered from those lows. Still likes it. Sees 20% earnings growth going forward. Global leisure travel demand remains very strong, though business portion is a bit slower. Geopolitical events are short-term, as there's always "somewhere else" people can travel. 

Tech upgrades expand margins. Higher beta, and at some point it may be time to take profits.

Still likes it. Paying 15-16x forward PE for 20-21% growth rate, very good value on PEG ratio. Chart looks attractive, though quite overbought. Just increased full-year outlook. Travel around the world continues to increase, so this name can do well long term. Makes sense on demographics. 

He took a little bit of profit, as its success made it too big a position in portfolios.

Global travel powerhouse. Owns some of the biggest brands. Bookings continue to be very steady, so there's growth there. Rising margins. Solid free cashflow. Unlike cruise lines, no heavy capex required. Strong loyalty program is boosting travel. 

Benefiting from aging demographics plus hybrid-remote work flexibility. AI analytics provides dynamic pricing that increases margins. Since pandemic, business travel has not picked up but leisure travel has exploded. Sees ~18% earnings growth. Yield is 0.74%.

Projected for 18% earnings growth in 2026, but trades at only 13x 2026 PE. Very cheap, cheaper than Booking Holdings.

Leader in the space. Online travel booking is a key element in the industry. Travel is resilient, and it has long-term demographic trends in its favour. Work-from-home can just as easily be work-from-Bermuda. 

Share drop is overdone. Now near 200-week MA. High-quality name. Earnings growth projected at 20% going forward. Strong cashflow. Online platform means it doesn't have to worry about capital expenditures. Yield is 1.05%.

Recent purchase. It's down 24% from recent highs, so it was an attractive entry point. Global travel demand remains resilient; higher than pre-pandemic, and holding steady. Consumer remains resilient. Lots of brands allows it to server diverse customer segments. Improved digital platform. Strong cashflow. Yield is 1.0%.

Interestingly, remote work trend allows people to work from...wherever. Earnings growth rate is ~19%, paying only 11x forward earnings, so a pretty good PEG ratio.

BOOK decided to be an agent only, so they take a commission on every transaction. Operating margins of 30%. Investors like the capital-light model, giving it a higher multiple between high 20s or almost 30x PE. Today though, PE in low 20s.

EXPE buys hotel rooms in bulk and then resells them; takes more risk and more capital. Operating margins of 10%. PE usually around 20x. PE today is in low teens. Though not as good a business, valuation discount is excessive. Better risk/reward.

It's missed earnings 3 times this year, but the shares have recovered each time. They can't establish any fundamental or technical momentum, and difficult comps lie ahead. 

Airlines in general have high debt levels, economic risk, sensitivity to the consumer, fuel price volatility. In the travel space, he'd rather own a BKNG or EXPE, where there are no capital costs. Or even a cruise line, which has demographics behind it.

Very competitive marketplace. Down today on overwhelming concern about consumer spending and prospects for travel for the next 12 months. BKNG is better positioned than EXPE, because Expedia's multiple brands cause confusion.

Generative AI is a concern for the future, as it may circumvent the go-between status of BKNG and EXPE and provide a personalized travel experience.

Expedia was down 16% in May after reporting a bad quarter, caused by poor consumer demand in the US and a multi-day outage in their home rental platform.

Company has had recent run up in price however does not score high on fundamentals (3/10). Has fairly strong brand, but better options out there for investors. If recession occurs, not a good business(travel expenses cut first). 

It's up 43% in November so far. He added it before that move, so he's glad. They benefit from having less activity in the Middle East than Booking Holdings.