that tells me the squeeze is on!
"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.
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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.
no panic, losses cover by insurance
no loss of customers, have plenty of product to cover that too............so why panic?
oh your short and trying to cause a dump! lol Get a life!
heading to 10 next
fill em up!
so they could keep their stock......lol, it amazes me how much Manipulation goes on with options and big money! Ok, lets get the news out on audits and announce that big stock buyback!
would explain why the last 3 days you see big volume right out of the gate as it moves higher. If he is buying long dated puts he is just adding buying pressure to someone else on the other side of the trade to keep covering too.
that have a time expiration on them at a much lower price that he will continue to squeeze ackmans 60% short position and now watch the put premium ackman paid go up in smoke as well. It's kinda like if I lose big on a short position i'm going to throw more money at it by buying puts now! lol
AUDIT results will come out very very very soon
shorts selloff here will put the pressure on to get them out
buyback will happen
Watch for news letters to pick up on it and recommend
The consolidation phase is over now that it showed its back on track with double the sales growth that it has shown.
Twitter IPO & Alibaba IPO............would kill interest in them
Actually need a major short squeeze after earnings in LNKD to guarantee big interest in Twitter and Alibaba