The online travel company sold its equity stake in eLong (LONG), a mainland China-focused travel agency, for $671 million to Ctrip (CTRP), a competitor in the mainland-China travel market on May 22. This, according to Cantor Fitzgerald analysts, indicates a strong competition in China's online travel agency market.
"We rate EXPEDIA INC (EXPE) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."