Expedia OR Booking Holdings Stock as an investment. Value Investor Decides

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Today I’m going to compare Expedia vs Booking.com (booking holdings) against each other.

Could any company be hit harder than Expedia and booking? Maybe some cruise ships and airlines? But that’s the same industry.
So we are talking about the most heavily affected industry, tourism.

That is what Expedia is all about.
They own some of the biggest online platforms for tourism.



And booking holdings own these platforms

Both companies are simply an online travel shop company for consumer travel, They reach customers through these websites, and a handful of others as well.

Debt/equity less than 0.7

So if you are new, remember don’t get too worried about what these terms actually mean, its just financial lingo.
Essentially Debt/equity simply means is the business big enough to pay its debt. I like to image that if the business was to completely stop, will it have more debt than the company is worth. And that would be bad, if the debt was more than the companies value.
I want to see less than 0.7,

Current Ratio. larger than 1.2
This is a figure that tells us if the company can pay its short term debts. Things in the next 12 months. like its interest on its loans, things like that.
If they cannot, it mean they will have to get more debt, just to cover their existing debt. It’s like getting a credit card to pay off another credit card. Just like it’s not a good idea to do this as people, we don’t want to see companies do that either.

We want to see a figure ideally a lot bigger than 1.2

Book value/share growing
Again, don’t worry about the terminology, this simply means if we were shareholders, would the value of our shares be getting bigger.

EPS growing

This simply means how much profit they are making and we want to see this growing.

Cash from operating activities growing

This shows as whether their day to day business is performing well.

Investing half the cash into investing act (between 40 – 80%)
This simply means is the management are using the cash flow to invest back into the business. We are looking for around half, but not less than about 40% or higher than 80% on average.

ROE greater than 10%
Probably the most important number. This pretty much tells as our return of investment into the company.
A good number here shows that management are investing the money into the business efficiently.
We are looking for a number above 10% and inclining. But generally consistently above 10% is good news. One year, of bad ROE isn’t the end of the world.

Free cash flow

This simply means the business isn’t becoming more expensive to operate. We want this to be trending upwards, which shows cash flow is growing faster than the costs to operate the company.

A dividend is your share of the profits. It isn’t all of the profit, a lot of the profit is kept by the company to grow. This is more of a bonus, it’s just nice to have a stable dividend.

I hope you enjoyed that analysis, it’s not always Blue sky’s and rainbows, actually I’ll Deny far more companies than I Approve.
But that’s how we get the best deal.
So stayed tuned for more video’s where I hope we can uncover a hidden gem or two.

Hit subscribe if enjoy my analyses and see you in the next video.


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