| Stock (Symbol) | Stock Price | |
Priceline.com (PCLN) |
$1292 |
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| Data is as of | Expected to Report | Sector |
March 21, 2013 |
May 5 – May 9 |
Retail & Travel |
| Sharek’s Take | ||
 Once again Priceline.com (PCLN) crushed earnings estimates, and this sent the stock to record highs. PCLN has been my best investment as a portfolio manager, its help my returns tremendously as its soared from $29 to $1200. Through the gains one thing I like most about PCLN is it almost always beats the street and raises expectations. Its Booking.com division is the leading online travel site in Europe, with its market share approaching 50%. This quality stock is big and dependable, the only concern I have is the P/E of 25 is higher than its usually is, and the stock has gone from $700 to $1300 in a year without a correction. |
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| One-Year Chart | ||
 PCLN plowed through $1000 last year and just won’t stop rising. I’ve always felt Wall Street didn’t appreciate PCLN enough, always giving it a P/E of 20 to 22 or so. Now the P/E is 25. Estimates show 20% and 25% growth ahead and 30% should be attainable. |
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| Earnings Table | ||
 I’m constantly amazed Priceline can continue to grow rapidly — as a young growth stock would. Sales rose 29% LastQtr, profits increased 31%.PCLN beat the street by 60 cents last quarter and has been crushing estimates for the past year. Annual Profit Estimates continue to push higher and higher. Quarterly growth looks good, I feel this company can grow 35% this year. |
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| Fair Value | ||
 When you consider 35% growth is probably ahead, the P/E of 25 is reasonable. But note PCLN has had a P/E in the teens-low 20s for most of the past ten years, a P/E of 35 is probably too much to ask (and I’ve asked for it many times). |
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| Ten-Year Chart | ||
 Priceline has gone parabolic — don’t be surprised if we get a correction. But still, the yearly profit growth rate of 50% a year is similar to the yearly stock growth of 47% a year, so PCLN isn’t overpriced. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
4 of 26 |
I feel Priceline.com is a good value at 25 times earnings as it could grow profits 35% in 2014, but don’t be surprised to see a correction as the stock’s almost doubled during the past year. |
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Aggressive Growth Portfolio
4 of 12 |
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