Expedia Inc (NASDAQ:EXPE) — This is one of the world’s largest online travel service companies. Standard & Poor’s projects that revenues will climb 31% in 2016, but they cut their earnings estimate by 9 cents for both 2016 and 2017 to $4.85 and $6.47, respectively. Acquisitions and divestitures, however, should help to add 14% to 2017 revenues vs. 2016’s number.
Q3 earnings were encouraging with significant contributions from newly acquired subsidiaries (Orbitz and HomeAway and the spin-off of TripAdvisor). Expedia should continue gaining market share thanks to these and pending acquisitions. The company plans to continue with their share repurchasing and issue dividends on regular basis. EXPE pays a dividend of $1.04 for an 0.9% dividend yield. In late October, S&P had an upward revision of their 12-month price target by $10 to $145. This is based on an EPS operating estimate price-to-earnings ratio of 22X.
Technically, EXPE is in an intermediate uptrend within a long-term bull market. A Golden Cross (long-term) buy signal was triggered in September followed by several positive signals from my internal CBR (Collins-Bollinger Reversal) system, most recently last Thursday. This CBR signal often occurs at high-volume lows and on support lines.
A reversal of this nature appears to have occurred last Thursday. A double top at $132 and a support line and 200-day moving average at about $115 define the trading range. The top of this range is the minimum objective for this trade.
Investors may want to consider EXPE as a strong addition to their portfolios since longer-term growth is management’s objective.
