Watch For Today's Momo Momentum Stock: Expedia (EXPE)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Expedia ( EXPE) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Expedia as such a stock due to the following factors:

  • EXPE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $239.0 million.
  • EXPE has a PE ratio of 44.6.
  • EXPE is currently in the upper 30% of its 1-year range.
  • EXPE is in the upper 25% of its 20-day range.
  • EXPE is in the upper 35% of its 5-day range.
  • EXPE is currently trading above yesterday's high.
  • EXPE has experienced a gap between today's open and yesterday's close of 0.9%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on EXPE:

Expedia, Inc., together with its subsidiaries, operates as an online travel company in the United States and internationally. The stock currently has a dividend yield of 0.8%. EXPE has a PE ratio of 44.6. Currently there are 6 analysts that rate Expedia a buy, no analysts rate it a sell, and 11 rate it a hold.

The average volume for Expedia has been 2.1 million shares per day over the past 30 days. Expedia has a market cap of $8.8 billion and is part of the services sector and leisure industry. The stock has a beta of 0.10 and a short float of 10.9% with 3.70 days to cover. Shares are up 6.7% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Expedia as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, expanding profit margins, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • EXPE's revenue growth has slightly outpaced the industry average of 15.3%. Since the same quarter one year prior, revenues rose by 18.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for EXPEDIA INC is currently very high, coming in at 83.53%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.22% is above that of the industry average.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet & Catalog Retail industry. The net income increased by 1306.5% when compared to the same quarter one year prior, rising from $6.73 million to $94.72 million.
  • Net operating cash flow has slightly increased to -$212.22 million or 2.08% when compared to the same quarter last year. Despite an increase in cash flow, EXPEDIA INC's average is still marginally south of the industry average growth rate of 7.91%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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