| Stock (Symbol) | Stock Price | |
Priceline.com (PCLN) |
$1182 |
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| Data is as of | Expected to Report | Sector |
June 12, 2015 |
Aug 10 – Aug 14 |
Retail & Travel |
| Sharek’s Take | ||
 Priceline (PCLN) is dealing with two issues — one which is temporary and another which is permanent. The strong dollar is crimping profits this year, and in the long run the company will have slower growth due to the of law of large numbers. 2015 profit growth is expected to clock in at only 4%, which investors are accepting as the stock isn’t declining on the news. PCLN’s Estimated Long Term Growth rate, which is what analysts predict profits will grow at during the next three-to-five years, is 18%, down from 20% last qtr. Honestly, I’ve owned this stock for almost a decade (originally bought for clients at $29) and analysts have always low-balled PCLN’s estimated growth. But now I would take 18%, as sales grew just 12% last qtr. PCLN stock is within 3% of my 2015 Fair Value, but has 24% upside to 2016’s Fair Value. With low oil prices and a solid travel environment, this stock continues to be a solid investment, just don’t expect much until next year. |
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| One-Year Chart | ||
 And now the days of +20% profit growth are gone. For a little while anyway. The dollar has stabilized recently so profit growth could accelerate next year. Stock is flatlining now. |
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| Earnings Table | ||
 Revenue growth fell from 19% 2QtrsAgo to 12% LastQtr. Profit growth also dropped, from 23% to just 4%.PCLN beat the street by 36% but had this estimate lowered by $1.85 a qtr earlier. Annual Profit Estimates continue to decline steadily. Perhaps a stabilizing dollar will stop the fall. Quarterly estimates continue to drop, and now profit growth is expected to be just 5% the next two qtrs. |
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| Fair Value | ||
 This stock has consistently traded for between 20x and 22x earnings the past five years. Now the P/E is 21. If profit growth accelerates next year this stock could move higher by 20% or more, but estimates are currently declining. |
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| Ten-Year Chart | ||
 An amazing investment PCLN has been, I don’t know where I would be without it. But that +4% growth at the bottom sticks out like a sore thumb, I’m surprised the stock hasn’t fallen from its perch. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
7 of 23 |
Priceline isn’t doing much this year, but is at least holding its own. I like the company for its stability sand ability to grow long-term and that’s why it continues to be a top-ten stock for me. That and I just don’t have many great stocks right now. |
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Aggressive Growth Portfolio
8 of 9 |
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