If you made a long bet on Expedia (EXPE) this year, you're either very smart or very lucky. And if you believe the media write about outperforming stocks at exactly the wrong time, take heed.
From the start of 2012 through Thursday's close, Expedia was up 72.8%, making it the sixth-best stock on the S&P 500 since Jan. 3. On Friday, it made investors even more money, rising 10.9% to $56.84. The gain came after the company reported better-than-expected third-quarter numbers. Adjusted earnings rose to $1.32 a share from $1.28 last year and topped estimates, while revenue was up to $1.20 billion from $1.02 billion in the 2011 quarter.
During the first half of the year, holding Expedia, Priceline.com (PCLN) and TripAdvisor (TRIP) would have given you some nice profits, but Expedia has stood out since and left the others behind. (Travelzoo (TZOO) and Orbitz (OWW) have substantially trailed the performance of other travel stocks for a longer period.) TripAdvisor, which was spun off from Expedia last December, was in fact the best-performing stock on the S&P through June, rising nearly 75%.
But favorable press coverage may have jinxed TripAdvisor's fortunes some days later. Going back to the start of July, the stock is down 35.4%, paring the gain for the year to 11.6%.
Priceline, meanwhile, remains up 16.7% for the year -- though, it was doing a lot better. On March 9, we simply had to point out that the stock was doing fine since the "death" of William Shatner's Priceline Negotiator earlier in the year. The stock, at $518 on Jan. 23, rose to $654 six weeks later, an advance that was noted at the time. It proceeded to go as high as $774.96, but from April 9, the stock has shed 24.3%.
Back to the present. On Friday, the whole group was trading higher, led by a 14% gain at Orbitz. Expedia itself was getting upgrades and positive comments from a series of analysts following the results. The price target was on the rise, too, going from under $62 just hours ago to $62.90 at last check. Several analysts now have $70 targets on the stock.
The all-time closing high of $59.37 was reached on Sept. 21 this year, meaning it's currently trading off about 4.5% from its record and 10.7% from the new consensus price estimate.
Can it get there? Well, so far Expedia has avoided the downdraft that's hit other travel-sector stocks in recent months. But maybe we'd be better off just not discussing it.
- Investment & Company Information