Priceline 1Q numbers - guidence lower

Priceline has recently been in the news for the wrong reasons, the CEO resigned a couple of weeks ago after admitting to having an affair with an employee of the business. An improper relationship led to Chairman Jeffery H. Boyd Appointed Interim CEO, Huston had been at the business for years and years. Why oh why can't people just keep their personal "stuff" away from the business, this happens all too regularly. I guess, who am I to judge these things, it is another reminder that no matter how you may be at the top of your respective industry, a fall from grace is possible at any moment. Big up to the board for having the courage to press on with this action against what is essentially one of the most powerful people in the company. I am pretty sure that Mr. Huston has deep regrets.

The business of business goes on. The company reported Financial Results for 1st Quarter 2016, a 21 percent increase in profits off an increase in first quarter travel bookings of an equal percentage. In constant currency terms revenues were 26 percent higher. The outlook however was muted, with revenue expectations of only 7-14 percent in Dollar terms expected for the full year. Gross profits expectations are expected to be in the region of 9-16 percent, again, this is no mean feat to be growing revenues and profits by mid teens. Most especially in what is very definitely an environment that is seen in part as not exactly friendly. 137 million room nights booked in the first quarter. There are now 31 percent extra hotels and territories, 900 thousand hotels to book from. In 220 countries around the globe.

For those of you who are not familiar with the business, they own various travel portals and interfaces, including ones that you may have used often, Booking.com, Priceline.com, Kayak, Agoda, OpenTable and rentalcars.com. I am pretty sure that you have used these services at some point if you are familiar with online travel. Even though the business turns 20 this year, the concept of travel completely online has only taken a true foothold in the smartphone era. It is completely paperless, you can book almost anywhere, in any currency, from your smartphone. Your airline tickets and place of residence will show up as tickets on your smartphone. I still think that people are yet to appreciate the awesome life changing internet. Think about how you booked a holiday 20 years ago, before all of these platforms existed. Physical airline tickets with carbon copies (don't lose that or you are stranded), remember those?

The stock traded sharply down after the release, the Q1 results were ahead of expectations, the guidance is below. At current levels of 1244 Dollars, with earnings expectations in the region of 55 Dollars a share, the stock trades on 22 times forward earnings for 2016, around 18.5 times forward for 2017. I really think that the company is in a very sweet space, more and more people are travelling around the globe than at any other time. Definitely look to accumulate on weakness.