Steve Mandel (Trades, Portfolio), founder of Lone Pine Capital, invests in companies using a fundamental, bottom-up approach. The long-short equity manager purchased 7,143,331 shares of Expedia Inc. (EXPE, Financial) Sept. 29 as mentioned in his Schedule 13G filing with the Securities and Exchange Commission.
The company traded at $118.40 per share, and Mandel increased his portfolio by 3.76% with this transaction.
Expedia offers several travel and leisure services to its customers, including airfare, rental cars, cruises and travel packages. The online travel company is overvalued based on its Peter Lynch Chart and several valuation methods as indicated by its valuation box. Additionally, its price-earnings (P/E) ratio is near a 10-year high of 87.33, and its price-book (P/B) ratio is higher than 81% of global leisure companies.
With a financial strength rank of 5, Expedia has a satisfactory business operation. The company has poor interest coverage: currently, Expedia’s interest coverage underperforms 84% of global leisure companies. Based on its Altman Z-score, the online travel company has moderate financial distress.
Even though the company has contracting operating margins, Expedia still has a profitability rank of 7. This suggests that the online travel company shows higher profitability and may stay that way in the short term. The company’s three-year revenue growth outperforms 90% of global leisure companies, and its three-year earnings-per-share growth is near a 10-year high of 41.4%.
See also
With his 7 million share purchase, Mandel has the largest stake in Expedia among the gurus and about 5 million more shares than Jana Partners (Trades, Portfolio).
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Disclosure: The author has no position in Expedia.
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