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Expedia(EXPE - Get Report) boasts the impressive title of being the world's biggest travel agent. The firm sells reservations to more than 145,000 hotels, hundreds of airlines, and scores of rental car agencies, cruise lines, and excursions. That network has produced a customer base that keeps coming back -- a very good thing in the increasingly competitive online travel industry.
Today, travel sites often offer "lowest price" guarantees, claims that they can make because they effectively all offer the lowest price for a given hotel or airline ticket. While that's lowered costs of travel and increased the popularity of online travel bookings, it's also commoditized the industry. As rivals vie for a share of a market that's already spoken for, Expedia's early successes at courting consumers should keep it in the top slot.
Meanwhile, it's working hard to replicate its successes abroad. Today, international markets make up more than a third of EXPE's total bookings, a big enough chunk to materially reduce the firm's exposure to the cyclical U.S. travel business, but a small enough chunk that it hasn't been overly hurt by a strong dollar.
Relative strength has been stellar for this stock of late, and with analyst sentiment still on the rise, we're betting on shares.
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-- Written by Jonas Elmerraji in Baltimore.