| Stock (Symbol) | Stock Price | |
Priceline.com (PCLN) |
$1098 |
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| Data is as of | Expected to Report | Sector |
November 7, 2014 |
Feb 18 – Feb 23 |
Retail & Travel |
| Sharek’s Take | ||
 From November 2012 to December 2013, Priceline doubled from $600 to $1200. A year later, the stock has taken the time to digest its gains, and now sits around $1100. Last year’s move was so fast the stock needed a break. Now PCLN isn’t growing as rapidly as it used to, and weakness in Europe might mean next qtr is the first qtr is two years where bookings don’t grow 20% (booking growth has slowed from 34% to 28% the past 2 qtrs). Still, all companies eventually encounter slower growth, and PCLN usually underpromises to overdeliver. The outlook suggests PCLN can still grow profits 24%, and at 18x 2015 earnings estimates the stock is once again undervalued. Although that kind of growth no longer makes PCLN a top-five stock (it was my #1 holding in years past), the company is still a solid investment. My upside to 2015’s Fair Value is 31%. |
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| One-Year Chart | ||
 Here’s the year when PCLN digested its gains. Click here to see the one-year chart from a year ago. When I see last year’s chart I don’t feel so bad about this one. Along the bottom, note quarterly profits have slowed from the 35% range to the 25% range. Slower but still good. |
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| Earnings Table | ||
 Priceline’s sales grew 25% last quarter, just a little worse than the 26% 2QtrsAgo. Profit growth was 23% last qtr.PCLN whipped street earnings estimates by 96 cents, and these estimates were lowered slightly in each of the prior two qtrs. Annual Profit Estimates fell some due to the strong dollar and weakness in Europe. But PCLN has had this happen many times in the past, and in most cases beaten the lowered estimates. Quarterly estimates declined, but 24% profit growth is still expected the next three qtrs. |
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| Fair Value | ||
 Looking at this table, PCLN usually sells for around 21 times earnings. So the stock isn’t really down if we look at the big picture. Upside to Fair Value is robust as it usually is, with 2015’s upside at 31% and 2016’s at 55%. |
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| Ten-Year Chart | ||
 This has been one of the top stocks to own during the last decade. Note profits used to grow around 50% a year. Even then investors didn’t appreciate PCLN. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
9 of 22 |
Priceline isn’t a young stud like it used to be. The days of 40% profit growth may be behind it. Still this is one of the most solid growth stocks in the market, and I forecast the stock will resume its upward trend in 2015. |
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Aggressive Growth Portfolio
9 of 12 |
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