Through TheFLY's Eyes: Expedia, Inc.
from Theflyonthewall.com






A Contrarian Call: It Might Be A Good Time To Buy

Through TheFly's Eye blogged about Expedia's (EXPE) horrific results on Friday. The stock is down from $26 to $14.50, or 44% during the last few months. The stock was down 25% in Friday's trading. Why would anyone want to look at this stock?

* The online travel industry is already laying a foundation for consolidation--Interactive Corp. (IACI) spun off Expedia last year and Cendant (CD) will be breaking Orbitz, its online travel business, apart during 2006.
* Yahoo! (YHOO) is going to have to decide what it wants to do with its online travel business--either sell or buy to consolidate the industry.
* This relatively new industry is proving to be counter-cyclical, when demand for travel is high, which is currently the case, Expedia has trouble getting inventory, whether it is hotel rooms, airline seats or cruise line tickets. As the economy slows, demand for Expedia's products will pick up.
* Hotel room growth and cruise-line capacity increases have been enormous during this economic expansion. Massive hotels and massive cruise ships are being constructed to meet the demand of the aging boomers. Whenever an industry has attempted to meet the demand for boomers, there is always a supply and demand imbalance.
* Cramer hates the stock. Often when Cramer hates a stock that is getting killed in trading, it is often close to a bottom. Cramer trashed the stock in his CNBC Stop Trading segment on Friday.

Remember, only 3% of the $900 billion global travel business is currently booked online. The online travel business is a young industry with huge market share gains ahead. This most likely is a good time to invest in this industry.