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Online Travel Sites Chosen By Benchmark Capital To Be Sub Sector Of Online Retailing Most Likely To Out Perform Market
67 WALL STREET, New York - November 11, 2009 - The Wall Street Transcript has just published its Online And Direct To Consumer Retailing Report offering a timely review of the sector to serious investors and industry executives. This special report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Online Retailer Profit Margins Vs. Bricks-And-Mortar Retailers - Uptick In Internet Commerce - Secular Shift In Market Share To Internet Retailers - Post-Crunch Consumer Confidence - Growing Market Share For Online Travel Agents - Possible Consolidation Of HSN, Inc. - Amazon As The "Wal-Mart Of The Internet" - Online Marketing Vs. In-Store Marketing - Maximized Markdowns - Online Traffic Conversion Rates - Social Networking To Drive Brand Awareness - Online Sales Holiday Outlook - E-Commerce As A Path To International Expansion
Companies include: Abercrombie & Fitch (ANF); Amazon's (AMZN); Ann Taylor (ANN); Apple (AAPL); Ask.com (IACI); Bebe (BEBE); Best Buy (BBY); Bidz.com (BIDZ); Dell (DELL); Dick's Sporting Goods (DKS); Expedia (EXPE); GSI Commerce (GSIC); GameStop (GME); Gap (GPS); General Motors (GM); Google (GOOG); HSN (HSN); HSN (HSNI); Hot Topic (HOTT); IAC (IAC); Liberty (LINTA); LivePerson (LPSN); MercadoLibre (MELI); Move Inc. (MOVE); Orbitz (OWW); Pacific Sunwear (PSUN); Quiksilver (ZQK); Ralph Lauren (RL); ShopNBC (WTV); South Korea's Gmarket (EBGMy); Sport Supply Group (RBI); Staples (SPLS); Starbucks (SBUX); Target (TGT); Timberland (TBL); Urban Outfitters (URBN); VeriSign (VRSN); Wal-Mart (WMT); WebMD (WBMD); eBay (EBAY); hhgregg (HGG); priceline.com (PCLN).
In the following brief excerpt from just one of the in depth interviews in the Online Retailing And Direct To Consumer Special Report, a leading equity research analyst discusses the outlook for the sector for investors.
Frederick Moran serves as a Managing Director who heads the Internet, media and communications stock research team for The Benchmark Company. His research focuses primarily on Internet, entertainment and outdoor advertising stocks. Previously, Mr. Moran headed the Internet, media and communications stock research teams at Stanford Group Company and Jefferies & Co. He has also worked in various capacities for ING Barings, Furman Selz, Solomon Brothers and Donaldson, Lufkin & Jenrette, and Drexel Burnham Lambert. Mr. Moran holds a B.S. in economics with a concentration in finance from The Wharton School, University of Pennsylvania, and he is a graduate of the Fieldston School.
TWST: Which sub-sectors within online retail do you think have the best potential for long-term growth?
Mr. Moran: I think most of the companies we mentioned have great potential for long-term growth. Amazon, eBay, Expedia, GSI Commerce, Orbitz, Priceline, they all are well positioned from a competitive standpoint to continue to steal share from their historical bricks-and-mortar competitors. They've all proven an ability to withstand the downturn and maintain at least decent financials, and their businesses are obviously tied to the U.S. consumer. So if the U.S. consumer comes back, their businesses should benefit.
The sub-sector that we have been touting as the most interesting this year is the online travel sector, Expedia, Orbitz and Priceline. What's happened for them is not only have they continued to gain share from traditional travel agents, but they've eliminated booking fees and run a number of promotions that have allowed them to grab incremental share from their suppliers, meaning the Web sites of the hotels themselves and the Web sites for the airlines themselves. Prior to the elimination of booking fees, if you went on Expedia's site to book an airline ticket and then went over to one of the airline sites, you could book the same ticket without a booking fee through the airline site itself. Now with the elimination of booking fees, you don't have to slip over to the airlines site and book through them, you just stay with Expedia, and you know you're getting the best price available. If you go and check it, you will certainly see that that's confirmed. So what we've seen is that the market share shift that was already occurring has accelerated. These online travel agents are gaining share at a more vigorous pace, and it's stimulating an increase in the amount of transactions that are booked through the online travel agents. Priceline has been the biggest beneficiary. Here in the U.S. they gained 3 million new unique visitors to their Web site over the summer, and a team that came at the expense of the booking sites of the hotels themselves. So as the consumer looks to get discounts on the Web and realizes that the best values are more readily available through the online travel agents as opposed to the hotel or airline sites directly, there is a more material and accelerated shift taking place that is benefiting these online travel agents and more than offsetting the impact of the travel slump overall.
Note: Opinions and recommendations are as of 10/01/09.
FREDERICK MORAN
Managing Director
The Benchmark Company, LLC
5550 Glades RoadSuite 500
Boca Raton, FL 33431
The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 38 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .
The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.
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