So I don't spend a lot of time on these message boards, but after an historic drop, I thought it would be interesting to see what people are saying. It's amazing there are so many doomsdayers out there, I suppose for most, it's just a reflection of tough times in their own lives.. anyhow, as it pertains to PCLN, there's a few facts that dispel a lot of the junk being written. Here's a few
1) This stock is overvalued? Not anymore. At around 20x PE (potentially less) and $1.4B in the bank, valuation is pretty fair, and it's undervalued if the growth is any better than forecasted. This is not a NFLX or CMG at all.
2) The Q3 forecast is contingent on Europe getting even worse. The catalyst for the stock is news that the EU is getting their act together, buying heavily in the bond market and getting the countries liquidity up. They'll do this, and when they do, it'll be good for PCLN and should start to build some growth back into Europe. The worst is nearly behind them. They just have to align on how, not if, and they have enough firepower to do it. Look for it in the next several weeks.
3) There are no margin calls coming that will impact the stock. One of the things I like most is that with PCLN being a ~$600 stock, there are few retail investors. Most need to use options to get a piece. It's comical to see people saying they are shorting or going long hundreds of shares. Most aren't, and the ones who are don't have near the investment to have .01 of impact to the stock.
4) PCLN is in an industry that will only grow. People aren't going to travel less, over time it will be more, and with a rising middle class in big countries, total world travel will grow exponentially. This makes PCLN in the sweetspot of a good industry.
5) PCLN is the dominant player. Sure, they have to execute, but with a big war chest of cash, and a lead position today in the industry, they'd be the odds on favorite to win market share. An econimic downturn can even be a good thing for strong companies with an ability to take market share
6) Where the price trades over the next few days or weeks isn't really important. The company is what it is, and the stock price will eventually reflect that strength. If there's any short term manipulation or big fund trades, they'll all get washed out over time.
So, I'm not saying go out and buy a bunch of PCLN, I personally bought a little today, just to put a stake in, but it's not enough to make a big difference. If it falls more, the buying oppty gets better, if it goes up, so be it, everyone long will start to recover.
It is hard not to like this company long term. They can buy the good competitors, crush the bad ones and grow this business for a long time to come.
its nice that you took the time to think about things from the positive side, but
1) i think CMG is a much better company than pcln. PCLN is certainly better than netflix
2) Europe getting better is a tall task, some bond buying will not solve a 20% unemployment rate in Spain and double digit unemployment else ware.
3) There will be margin calls, maybe not to the extent which board members were crying out, but a 1 day 20% drop caught a lot of people off guard.
4) it is a growing industry, but the competition is heating up, just read PCLN's 10q and it will scare you senseless.
5) i dont know how the cash is going to help them, half of it oversees and they even say there not bringing it back. anyone can create a travel website. There is no service involved in this type of business, the only advantage is price.
1) If PCLN is valued like CMG, it's over $600 right now. Better or worse doesn't matter, CMG is growing single digits, PCLN double digits. The PEG make a difference, and PCLN has a big advantage.
2)You're right. But 20% unemployment in spain isn't the problem, it's an outcome of the real problem not getting solved. It is a big task, and there's risk there, no doubt.
3)Not likely going to move the stock, margin calls tend to get covered without selling the issue, unless the entity wants out, then it doesn't matter if it's a call or not.
4)I've read the call and the 10q. It's pretty common C level speak. Of course they are thinking about the competition. I'd be worried if they weren't!
5)They don't need to bring it back to spend it. And, while on the surface it looks like it's just price, there's lots of technology, relationships and service involved in doing it well. Marriott, Hilton and United Airlines aren't going to trust any site. A problem with the service agent, and it reflects on the big boys. PCLN has built the credibility and has the inventory others can't reach. I agree that a good viable growing competitor may need to be bought if theres synergies that help make PCLN stronger, but right now there's enough business for the top co's, as stated by Mgt.
I think that's the wild card that really hit shares today. You're spot on, if Europe blows it it's going to be ugly.
I do think that Germany and France both know that if the EU comes apart, they'll get hit hard, thus, I think the Euro Bond will happen and EU leaders will realize they'll all sink or swim together. That should happen sooner than later. Won't solve Spain's unemployment, and other countries debt issues, but it will signal to the market that they're on it, and increasing liquidity should free up some tight capital issues and spark investment, at least in the short term. It's slow going, but it's what the US has done and while we're not where we need to be, it's not a disaster either.
You said it all. "where the price trades over the next few days or weeks isn't important" Wow. You don't care if it goes down. Some of us do not want to lose hard earned money in the near term. All the fundamentals in the world will not help you in the middle of a high flying stock that is in the process of crashing. Good luch calling yourself a trader. I guess you are just a true believer. And I can't tell you how many true believers in stocks have gotten wiped out.
Well, you can be a "trader" but I prefer to invest to make money, and when I want to be a trader, I head to Vegas and play some poker. Your odds are about the same.
There's no way to know what the stock is going to do in the short term. Too many macro events in the world driving the markets.
So good luck, I don't wish for anyone to lose money, but you have to separate gambling from investing.
If you want to trade, this definitely isn't the stock to do it with!