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Setting Up For Another Big Move

Stock (Symbol) Stock Price

Priceline.com (PCLN)

$468

Data is as of Expected to Report Sector

December 21, 2011

Feb 20

Retail & Travel

Sharek’s Take
David Sharek

Priceline.com’s (PCLN) cheap again. The current P/E of 16 is very low. Other Q4 P/E’s include 2010’s 28, 2009’s 21, 2008’s 12 (when the stock was $68), 2007’s 23 and 2006’s 17 (when the stock was only $43).

International sales continue to zoom. International bookings were up 73%, domestic bookings 13%. Overall bookings rose 56% last quarter. Only around 1/3 of travel in Europe is booked on the internet — there’s still a ton of room to grow. PCLN is set up for another fantastic year in 2012.

One-Year Chart
I can’t believe profits rose 87% last quarter and the P/E is only 16. PCLN’s estimated Long Term Growth Rate is 29%. The P/E should be double what it is — at least.Profit growth is estimated at 49% and 42% the next two quarters. Everything here is solid.
Earnings Table
Profits jumped 87%, the fastest growth since the 4th quarter of 2007 when profits rose 140%. Sales jumped 45% LastQtr, 44% 2QtrsAgo.

PCLN keeps surging past profit estimates — 65 cents LastQtr, 62 cents 2QtrsAgo

Annual Profit Estimates disn’t jump like they usually do. I don’t know why.

Quarterly estimates look great, and could get whipped when its said and done. Next Quarter’s estimate declined due to uncertainty in Europe with the financial crisis and flooding in Thailand (which has lowered estimates in past years as well).

Fair Value
Even with a P/E of 35, which is lower than the 45 I normally have it at, PCLN is still worth more than double today’s price.
Ten-Year Chart
Priceline has had one bad year during the past decade. Before 2001 the company had multiple years of losses before going profitable, as it spending to grow its business.

Yearly EPS Growth has been 51% a year, Yearly Stock Growth only 30% a year. These numbers should be similar, PCLN stock has some catching up to do.

Power Ranking Bottom Line
Growth Portfolio

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Priceline’s P/E of only 16 gives the stock huge upside. The stock si worth double what its is selling for today.

In my Power Rankings, PCLN is ranked 2nd stock in the 20 stock Growth Portfolio 10 stock Aggressive Growth Portfolio
. Apple (AAPL) is ranked #1 because it increased profit estimates more than PCLN last quarter. Baidu.com (BIDU) is #3, its got a higher P/E of 27.
Aggressive Growth Portfolio

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