U.S. Investing

Time to Sell Expedia

While the Expedia share price (NASDAQ:EXPE) rose 380% from $29 in December 2011, to more than $143 where it is currently trading, TurnerTrends Tools are indicating that the share price has peaked and that your money might yield higher returns elsewhere.

Some of EXPE’s indicators are still positive. In early September 2017, the company just paid its third-quarter dividend that was 7.1% higher than the previous quarter’s dividend distribution. While the 53% dividend payout ratio is on the higher end of the range, it is still within bounds of sustainable payout ratios.

For the past 12 months, the share price rose more than 29% and shareholders received a 33.89% total return on investment. However, some indicators point to a potential trend reversal that could wipe out a good portion of profits that the investors earned so far.

While the dividend payout ratio is sustainable and the total annual dividend payouts rose for the past three consecutive years, the dividend yield has not kept pace with share price growth. The dividend yield is only 0.85%, which is a third lower than Expedia’s average dividend yield over the past five years.

Additionally, EXPE’s current dividend yield falls short when compared to dividend yields of peers in the sector. Expedia’s current 0.85% yield is less than half of the 1.93% total market average and only 36% of the services sector’s 2.37% average yield.

While the share price appreciated and returned substantial gains over the past several years, the uptrend seems to have reversed direction since the price reached its all-time high of $161.00 during trading on July 28, 2017. The last significant price pullback occurred between the beginning of November 2015 and early February 2016 when the share price depreciated by a third and dropped from $137.31 to 94.53 in just three months.

After reaching the $95.53 low in February 2016, the share price grew almost 23% by the beginning of 2017, albeit with considerable volatility. However, the price rose 43.2% with minimal volatility between January 3, 2017, and its all-time high on June 28, 2017.

Since the June peak, the share price already pulled back more than 11% in less than 90 days. Additionally, the 50-day moving average (MA), which has been rising steadily ever since it crossed above the 200-day MA in late August 2016, reversed trend and has been falling consistently since late June 2017.

Share price movement, moving averages, consecutive dividend yield boosts and dividend payout ratios are just a few of the simple and readily available indicators that can point to possible trend reversals. However, TurnerTrends Tools scores each stock based on a combination of 12 fundamental ratings and five technical ratings to analyze performance from both aspects and improve significantly the probability of accurately identifying trend reversals. The current score sends a clear sell indication for EXPE.

While the Expedia stock might have peaked and is moving toward a downward trend, TurnerTrends Tools have identified new buy signals for investments that are likely to trend upwards.

Each week, more than 6,000 stocks and ETFs are scored on 12 fundamental and 5 technical ratings. You also get an up-to-date stop price so you’ll always know exactly when to sell. To discover those promising opportunities, all you have to do is sign up for our Tools by clicking here now.

Mike Turner

Mike Turner made the decision to fire his brokers and financial advisors and do it himself back in 1998. Then, he took his three decades of running advanced software development companies and applied that technical knowledge to the design and development of an entirely new stock analysis system. Mike’s financial, mathematical, computer science and engineering background serve as the foundation for his disciplined, rules-based approach to trading. He does not rely on instinct, gut-feelings, emotions, analyst opinions or hunches. Mike’s trades are based on solid fundamental, technical and time-cycle based forecasting analytics. Mike’s methodology and software systems are used to scan the universe of stocks and ETFs to find the highest scoring equities that have the greatest probability of success. Mike is a disciplined and formulaic trader and he conveys that approach to his subscribers through his services. The trade-timing tools Mike has developed cover the gamut of time cycle market forecasting, fundamental analysis and technical trends of stocks, sectors, industries and global markets. He utilizes his proprietary market-timing programs to provide him and his subscribers with trade-sensitive analysis results about when to be in the market and when to be in cash. In his book, 10: The Essential Rules for Beating the Market, Mike describes his rules-based methodology for picking the right stocks at the right time, holding those positions as long as they are making money and timing exactly when to sell to maximize net total return. The objective of Mike’s methodology is to think like a fundamentalist but trade like a technician. His book, published by Wiley and Sons, encapsulates Mike’s fundamental and technical approach to trading. Mike is the creator of the Bloomberg time-cycle forecasting system that is available to more than 330,000 Bloomberg terminals worldwide. Some of the most prestigious and influential private and governmental financial institutions in the world have used Mike’s proprietary trade-timing technology. Mike’s quant-based analysis programs are also used to produce time-cycle research and analysis for Bloomberg along with large, high-profile brokerage and financial management firms. Mike is often quoted in the prestigious Investor’s Business Daily; is an active partner and guest speaker for the CBOE (Chicago Board Options Exchange); and has been published extensively in Equities Magazine.