hedge funds and mutual funds will continue to rush into this name
They will want to show the big winners and have a chance to buy this one on the cheap
"I think Priceline is actually among the cheapest momentum stocks out there," insists the Mad Money host.
"When you back out the billions of dollars of cash on the company's balance sheet, Priceline sells for just 19 times next year's earnings estimates, despite having a 20.7 percent long-term growth rate," he said.
Of course Cramer is a fundamental investor and he doesn't think an inexpensive stock is a buy simply because it's undervalued. "Lots of stocks seem undervalued and then stay that way forever," noted Cramer.
Jpa1999 | E+ | Getty Images
In the case of Priceline, the Mad Money host sees the stock as well positioned to profit from a major shift underway in the travel industry - something Cramer calls a long-term theme.
In this case, the investable theme involves individuals as well as business travelers forsaking travel agencies and instead booking online.
Of course Priceline isn't the only online travel site winning share away from travel agencies. Others stand to gain market share, too. However, Cramer thinks of all the companies in the space, Priceline is the best stock to own. Here's why:
1. Overseas growth: "Priceline has huge European exposure," said Cramer and I believe that's a big opportunity. In fact, Priceline gets 85 percent of its bookings from overseas versus just 44 percent at Expedia and a piddling 20 percent at Orbitz."
2. Hotel strategy: "The vast majority of Priceline's revenues come from hotel bookings—90 percent to be exact—which is much more profitable than selling airline tickets," Cramer explained. "The global lodging industry is extremely fragmented, whereas the airlines industry has been consolidating rapidly. Expedia is only 75 percent hotels, and Orbitz is merely 50 percent."
3. Profitable business model: "Priceline was the first player in the industry to adopt an agency business model, meaning they act as a broker between the hotel and the customer, and then take a 15 to 20 percent cut of the transaction whenever someone books a room. This is a much safer way to do business than the merchant model, where you buy hotel inventory upfront and then take on all of the risk, even as you do get a larger cut if you end up selling the rooms," Cramer said.
4. Mobile strategy: "Priceline has become the king of mobile travel reservations thanks to its brilliant $1.8 billion acquisition of Kayak, completed earlier this year," Cramer said.
All told, Cramer sees every reason for this stock to rally further.
If they signed up a major big box distributor that is news worthy and needs to be announced!
Come on management improve your PR!!!
place your bet and lets see! lol
1115 coming and then blast off
will move quickly up as shorts get squeezed
as long as everyone thinks that the market will confound you and continue to go higher and higher!
float is drying up and pretty amazing a pink sheet stock is drawing that kind of ownership!
6. Citizenship or Place of Organization: United States
Number of 7. Sole Voting Power: 0
Shares Beneficially 8. Shared Voting Power: 8,333,335*
Each Reporting 9. Sole Dispositive Power: 0
Person With 10. Shared Dispositive Power: 8,333,335*__
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions): Not Applicable
13. Percent of Class Represented by Amount in Row (11): 10.8%*
14. Type of Reporting Person (See Instructions): IA, IN
* This is a joint filing by Austin W. Marxe (?Marxe?) and David M. Greenhouse
(?Greenhouse?). Marxe and Greenhouse share sole voting and investment power
over 1,666,667 shares of Common Stock owned by Special Situations Cayman
Fund, L.P., 5,833,334 shares of Common Stock owned by Special Situations Fund
III QP, L.P. and 833,334 shares of Common Stock owned by Special Situations
Private Equity Fund, L.P. See Items 2 and 4 of this Schedule for additional
Page 3 of 6 Pages
Item 1. Security and Issuer:
(a) Vapor Corporation
(b) 3001 Griffin Road, Dania Beach, Florida 33312
Item 2. (a) Name of Person Filing:
The persons filing this report are Austin W. Marxe (?Marxe?) and
David M. Greenhouse (?Greenhouse?), who are the controlling principals of AWM
Investment Company, Inc. (?AWM?), the general partner of and investment
adviser to Special Situations Cayman Fund, L.P. (?Cayman?). AWM also serves
as the general partner of MGP Advisers Limited Partnership (?MGP?), the
general partner of Special Situations Fund III QP, L.P. (?SSFQP?). Marxe and
Greenhouse are also members of MG Advisers L.L.C. (?MG?), the general partner
of Special Situations Private Equity Fund, L.P. (?SSPE?). AWM serves as the
investment adviser to SSFQP and SSPE. (SSFQP, Cayman, and SSPE will hereafter
be referred to as, the ?Funds?). The principal business of each Fund is to
invest in equity and equity-related securities and other securities of any
kind or nature.
(b) Address of Principal Business Office or, if none, Residence:
The principal business address for Marxe and Greenhouse is 527
Madison Avenue, Suite 2600, New York, NY 10022.
higher interest rates are bad for high growth momo stocks