Priceline built its business on the premise that people want to pay a lower price for travel services than what is advertised. The company started by targeting air travelers with good deals on flights. It has since expanded to include hotels, rental cars, and vacation packages.
With William Shatner in a campy role as spokesperson, the company’s commercials are at least memorable and keep it visible. Since peaking in May of this year at around $140 a share, its stock has slid back a bit, to the current $60 range. However, with the major holiday travel season looming on the horizon, I think the fortunes of Priceline could turn soon.
Traveling during the holiday season, unlike the rest of the year, is almost unavoidable, even with airfares climbing. And with shrinking wallets, consumers will employ every resource available to get the cheapest possible fares and accommodations. This leads me to believe that Priceline could see a nice bounce in earnings when it announces first-quarter 2009 results.
Of course, to take advantage of this, you want to buy Priceline well before the earnings announcement. And with the recent pullback in the stock price, you can now get in cheaper than you could have a few months ago. But before you buy, wait until the stock ends its current slide and starts to gain upward momentum again.[Ed. Note: Keep your money safe during these shaky times by making smart investment choices. Companies with strong fundamentals are best equipped to withstand major market changes. But don’t be afraid of fluctuations in the market.]