With shares of Priceline (NASDAQ:PCLN) trading around $803, is PCLN an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let?s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock?s Movement
Priceline is an online travel company that offers its customers hotel room reservations at a growing number of hotels worldwide through the Booking.com, priceline.com, and Agoda brands. In the United States, the company also offers its customers reservations for car rentals, airline tickets, vacation packages, destination services, and cruises through the priceline.com brand. It offers car rental reservations worldwide through rentalcars.com. Companies like Priceline are well-positioned to accommodate consumers with travel arrangements at competitive prices into the future. As economies grow and continue to recover, consumers worldwide are looking at travel as an excellent way to spend discretionary income.
T = Technicals on the Stock Chart are Strong
Priceline stock has seen an explosive move higher over the last few years. The stock is trading at all-time high prices and sees no signs of slowing. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Priceline is trading above its rising key averages, which signal neutral to bullish price action in the near-term.
(Source: Thinkorswim)
Taking a look at the implied volatility (red) and implied volatility skew levels of Priceline options may help determine if investors are bullish, neutral, or bearish.
| Implied Volatility (IV) | 30-Day IV Percentile | 90-Day IV Percentile | |
| Priceline Options | 23.36% | 10% | 11% |
What does this mean? This means that investors or traders are buying a minimal amount of call and put options contracts, as compared to the last 30 and 90 trading days.
| Put IV Skew | Call IV Skew | |
| June Options | Flat | Average |
| July Options | Flat | Average |
As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a minimal amount of call and put option contracts and are leaning neutral to bullish over the next two months.
On the next page, let?s take a look at the earnings and revenue growth rates and the conclusion.
Source: http://wallstcheatsheet.com/stocks/is-priceline-a-worthwhile-investment.html/
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