Watch For Today's Momo Momentum Stock: Priceline.com (PCLN)

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

  • PCLN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $1.3 billion.
  • PCLN has a PE ratio of 37.6.
  • PCLN is currently in the upper 30% of its 1-year range.
  • PCLN is in the upper 25% of its 20-day range.
  • PCLN is in the upper 35% of its 5-day range.
  • PCLN is currently trading above yesterday's high.
  • PCLN has experienced a gap between today's open and yesterday's close of 3.5%.

'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 PCLN:

2012 comments from Michael Karsch Priceline is a fantastic example of a lifecycle stock. It was a 1999 darling. Everyone thought that they were the geniuses of the world. They had this interesting notion of how to do a reverse auction. PCLN has a PE ratio of 37.6. Currently there are 16 analysts that rate Priceline.com a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Priceline.com has been 625,700 shares per day over the past 30 days. Priceline.com has a market cap of $66.9 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.48 and a short float of 1.7% with 0.84 days to cover. Shares are up 9.6% year-to-date as of the close of trading on Wednesday.

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 Priceline.com as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 15.4%. Since the same quarter one year prior, revenues rose by 33.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 4.00, which clearly demonstrates the ability to cover short-term cash needs.
  • Powered by its strong earnings growth of 34.81% and other important driving factors, this stock has surged by 81.21% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PCLN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • PRICELINE.COM INC has improved earnings per share by 34.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PRICELINE.COM INC increased its bottom line by earning $27.71 versus $20.65 in the prior year. This year, the market expects an improvement in earnings ($41.20 versus $27.71).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Internet & Catalog Retail industry average. The net income increased by 39.6% when compared to the same quarter one year prior, rising from $596.59 million to $832.99 million.

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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