It has been an extremely difficult period for companies in the travel market. Concerns over Zika and terrorism are making those that would otherwise travel
stay home, hitting a number of companies in the airline, hotel, and cruise markets.
But another area that has also been impacted is the online travel review market, with companies like TripAdvisor ( (
TRIP - Analyst Report) being prime examples. After all, why would you review thingsor look at reviewsfor a trip that
you arent going to make anytime soon?
Dont believe me? Well, take a look at how TRIP has done in its recent earnings reports as a guide.
For both of TRIPs most recent earnings reports the company missed earnings estimates. The company saw a 40% miss two quarters ago, and it followed it up
with a 9.6% miss in the most recently completed quarter.
Investors sold off the stock as a result, and shares of TRIP are approaching 2016 lows as a result of these recent sell-offs. And with some of the recent
earnings estimate revisions, it is hard to have an optimistic look on TRIP stock these days, suggesting TRIP may test those 2016 lows before long.
Following the most recent miss for TRIP, analysts have been racing to downgrade their expectations for the stock in both the near term and the long term.
Who can blame these analysts given the rough overall travel environment, and the fact that TRIP has had great difficulty in living up to earnings
It is also worth noting that analysts havent just been giving a slight reduction in estimates lately, as shares have seen nearly double digit percentage
Consensus estimate reductions for the current quarter, while the full year has seen a 10.2% reduction in the Consensus.
With these kinds of metrics, it shouldnt be surprising to note that TRIP has a Zacks Rank #5 (Strong Sell) and that it is currently ranked in the bottom
five percent of all stocks from this important look. And with a VGM score of F (thanks to a grade of F in Value) there is little to like about this
stock right now, and especially in todays environment.
TRIP is clearly a name to avoid right now, though there are few better choices in this corner of the travel world. (
EXPE - Analyst Report) and ( PCLN - Analyst Report) at least have ranks of hold but
that isnt that much better.
Instead, it may pay to look to leisure and recreation stocks instead, as there are a few gems in this corner of the investing world. In particular, we see
strength in both Marine Products (
MPX - Snapshot Report) and Pool Corp ( ( POOL - Analyst Report) which both have Zacks Rank #2 (Buy) ratings. Plus, since both just came out of hold territory
and are less impacted by broad Zika or terrorism woes, they could be better consumer choices in todays uncertain world, and most likely better than TRIP
in the near term too.
For more on stocks to avoid and how to bet on companies to go down further, make sure to listen to our podcast below on How to Short Stocks.
More Stocks to Sell. Now.
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