Money Matters, Simplified.
1-Star Stocks Poised to Plunge: priceline.com?
Thu, 03/18/2010 - 12:08 by Brian D. Pacampara
Based on the aggregated intelligence of 160,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online travel company priceline.com (Nasdaq: PCLN) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at priceline's business and see what CAPS investors are saying about the stock right now.
priceline.com facts
Headquarters (Founded) | Norwalk, Conn. (1997) |
Market Cap | $11.0 billion |
Industry | Internet retail |
Trailing-12-Month Revenue | $2.3 billion |
Management | CEO Jeffery Boyd (since 2002) |
Trailing-12-Month Return on Assets | 18.7% |
Price-to-Cash Flow (PCLN and S&P 500) | 23.5 and 7.1 |
1-Year Return | 201% |
Competitors | Expedia (Nasdaq: EXPE) |
Strategic Partners | Marriott International (NYSE: MAR) |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 30% of the 943 members who have rated priceline.com believe the stock will underperform the S&P 500 going forward. These bears include SpiffGriff and davbeirney.
Two weeks ago, SpiffGriff thought that the stock's recent surge seemed particularly unsustainable: "[priceline] has seen such a quick run up in the last 6 months that I think it has peaked (for now) in the $230-$240 range. As a result, I expect their shares to drop about 5-7% from speculation of a market correction in the near future and/or profit taking."
In an earlier pitch, davbeirney also warned Fools about paying the price for priceline:
I can't lie. I was impressed by the earnings power that this company has. Even though there was a significant increase in bookings, I would not want to buy into a stock that has had a huge run already. Not to mention the hotel and booking industry as a whole. People are losing jobs, and consumers are spending less. How high can investors be willing to pay such a premium for this stock while they know this info is staring them right in the face.
© 2010 UCLICK L.L.C.
