Updated: 4/22/2011 6:58 PM ET|
10 stocks to watch in the week ahead
Expedia, the nation's biggest online travel agency, appears on an MSN Money list of recommended stocks. Here are StockScouter's best investment ideas.
While agreeing that the move would be good for shareholders, analysts debated why the Bellevue, Wash., company would slice off a unit that provides search and travel reviews to the 50 million unique monthly visitors to its 18 branded websites. TripAdvisor's revenue grew 38% in 2010, outstripping Expedia's 13%. Expedia had $3.3 billion in sales last year, with TripAdvisor contributing $486 million.
"We continue to think that actions intended to better realize TripAdvisor's value will be constructive for (Expedia) and its shareholders,'' Scott Kessler, an Internet analyst at Standard & Poor's Equity Research, said in a note. Kessler reiterated his "strong buy" rating on the stock.
A stand-alone TripAdvisor could command a market valuation of $4 billion, Deutsche Bank analyst Herman Leung said in a note to clients. Expedia paid $219 million for the business in 2004.
Others speculated that competitive pressures were behind the proposed spinoff. Expedia's stock price has lagged far behind that of rival Priceline.com (PCLN, news). And traffic to TripAdvisor's website is expected to come under attack from Google (GOOG, news), which this month completed its controversial acquisition of ITA Software, a provider of back-end search and booking technology to travel search engines. Critics said the deal gives Google technology that could be used to make it harder for rivals to gain visibility on the Web.
Expedia appears on a daily ranking created with StockScouter, an MSN Money tool that identifies stocks with strong growth prospects in the near term. All stocks with Scouter ratings of 8, 9 or 10 are considered for the list, which is then shortened to exclude stocks with a trading volume below 50,000 shares a day. The remaining stocks are ranked on the basis of market capitalization, sector membership and whether they are growth or value stocks.
The spinoff would leave Expedia with its "transactional brands," including Hotels.com, Hotwire and carrentals.com, which make money from bookings. A stand-alone TripAdvisor would feature more than a dozen websites that provide travel-related information and opinion, supported by advertising. It also receives revenue when visitors click through to other transaction-based websites to make travel arrangements.
Expedia officials said shareholders will receive TripAdvisor shares in a tax-free deal when the spinoff is completed, probably in the third quarter.
TripAdvisor, headquartered in Newton, Mass., was acquired in 2004 by media executive Barry Diller and folded into Expedia, then part of Diller's Internet conglomerate IAC/InterActiveCorp (IACI, news). Diller had bought out Microsoft's majority stake in Expedia three years earlier and installed himself as chairman. Expedia was spun off from IAC in 2005.
Of the 20 analysts covering Expedia, six rate the stock a "strong buy," two have "moderate buy" ratings and 12 have "hold" recommendations.
The stock has a StockScouter rating of 9, meaning it is expected to significantly outperform the market over the next six months with average risk.
|StockScouter top 10|
|Company||Sector||Dividend yield||Forward P/E||Scouter score|
|Chesapeake Energy (CHK, news)||Oil and natural gas||0.9%||10.0||10|
|Medtronic (MDT, news)||Medical devices||2.0%||11.3||10|
|PPL (PPL, news)||Electric utilities||5.0%||10.7||10|
|AT&T (T, news)||Telecommunications||5.7%||12.1||9|
|Exxon Mobil (XOM, news)||Oil and natural gas||2.1%||9.7||9|
|Barrick Gold (ABX, news)||Mining||0.9%||12.5||9|
|Expedia (EXPE, news)||Online travel services||1.2%||12.4||9|
|Kinross Gold (KGC, news)||Mining||0.7%||16.5||9|
|Philip Morris International (PM, news)||Cigarettes||3.9%||13.7||9|
|Teva Pharmaceutical Industries (TEVA, news)||Generic drugs||1.0%||7.9||9|
StockScouter beats the market
At MSN Money, we think our StockScouter rating system is about as good as it gets when you're trying to decide where to invest. Scouter rates stocks on a scale of 1 to 10. Since it was launched on Aug. 1, 2001, a portfolio of Scouter's top 50 picks has generated a total return that has clobbered the return of the Standard & Poor's 500 Index over the same period.
StockScouter looks for stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price in the future, based on how those factors have influenced stock prices in the past. The system assigns each stock an expected six-month return and balances that return against the stock's expected volatility.
Consider the above list a starting point for your research.
VIDEO ON MSN MONEY
Did anyone actually follow the scout ratings and earned 23.8% per year? Please speak up.
Or this is just theory.
I've been doing a lot of market research for medical device and biotech companies - two industries worth watching and investing in if the price is right for you.
A little investing in the right stocks, and yourself, makes life a lot more fun.
The real "investment" should be in propane and hydrogen tech for passenger cars ... anything else is just propaganda and you have been expensively duped!!!!,
I agree with above-but if you want to make a lot of money-patiently hold the emerging market stocks that, are going to grow with their own country's economic growth.
This is known as domestic consumption-get a fund that, holds local currencies, which also will give you added diversification.
Your salary is in dollars or your social security is in dolllars-why put all of your eggs in one currency egg basket. I believe that twenty per cent is the maximum exposure-most of us can not tolerate the fluctuation of a larger position-ten or fifteen per cent is fine too.
No investment is worth losing slip over-it will make you sell when it fluctuates down-never even buy anything which you have a past pattern of selling when it goes down.
I am a professional-aand even I cannot overcome this primal cave man (fight or flight) reflex!
Hold as much as possible in annuities with strongly rated insurance companies, to allow yourself the peace of mind to also own emerging market investments.
With MSFT, INTC, CSCO, GOOG, and AAPL going nowhere, it makes you wonder if there's money to be made in this market.
they say the gas went up $1.00 since a year ago, who got a raise this past year.
CEO'S, government, you know like pelosi.
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Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
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