WTF - Wotif.com Holdings

[JTLP]

WTF all round in the last 2 sessions. Today looks like capitulation? Big volume and finished well off the low. $4 was resistance / support from some time back.

Possibly a short term bounce back to $5?

Attachment 38612

On the fundamentals, yield is now a respectable 4.9%. EPS 25.34c which means a PE of 17.4. Earning growth historically at 20% p.a. so PEG <1 which seems somewhat attractive. Seems "well priced" at the moment IMO barring any major external shocks.

Article in the Fin Review a while back regarding WTF needing to expand. The domestic market is not growing as much as anticipated and WTF lack of resources in the international area (covered by expedia) apparently will hurt due to cheaper international travel back in vogue (as a result of shaky Eco conditions = cheaper flights).

Hope that helps

[So_Cynical]

I've been watching with some amazement WTF yet another bullet i have dodged, don't know how i keep doing it, i had WTF short-listed just a couple of weeks ago when i was looking to add a stock to my portfolio...i thought $5 would be support.

I thought the annual report was pretty dam impressive, lotsa good numbers and lots of SP potential i would think....WTF is a great little business, its just that the internet is so virtual, and i think its hard to have over whelming confidence in something that's so disposable.

There are very few barriers to entry, the margins are low, its all very cut throat and Gen Y are so fickle.

[Knobby22]

I think it is a good company and have been eyeing it like you however it still appears expensive.

I would want the yield to be around 7% before I got interested. So maybe around the $3-3.50 mark.

As you say too many risks in this company to pay a premium.

[craigj]

its a great business but they were trading on a pe of around 27 for a company lacking exponential growth and having no economic moat

now the share price has dropped the pe ratio looks a lot more attractive
stop losses would have caused the share price to keep droping

but it will bounce as fund managers love these kind of stocks which require little equity

wotif also only has 58% brand recognition in australia so as that improves business should increase

[Trader Paul]

Hi folks,

WTF ... will be alert for some positive news and a lift in price
over the next couple of days, as a positive time cycle comes
into play ...

have a great day

paul



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[matty77]

Anyone got any current analysis on this stock?

Good time to buy.... floods are over, no more cyclones or fires (maybe)

[ValueSnatcher]

Anyone got any current analysis on this stock?

Good time to buy.... floods are over, no more cyclones or fires (maybe)

stock still isnt that cheap in my opinion. The aussie dollar is another factor to consider...alot of people will be avoiding holidaying in Aus due to their currency not stretching very far...of course you could see these things as short term and as such presenting you with a nice chance to buy...but for me I would like to make an investment in this stock with the first digit being a 3
just some things to consider..

[ROE]

stock still isnt that cheap in my opinion. The aussie dollar is another factor to consider...alot of people will be avoiding holidaying in Aus due to their currency not stretching very far...of course you could see these things as short term and as such presenting you with a nice chance to buy...but for me I would like to make an investment in this stock with the first digit being a 3
just some things to consider..

I Agree, price is the only thing that stop me from getting it

its business model is better than Webjet and more of Centrebet like

I already got Centrebet

[matty77]

spewing, was holding off at $4.38... now up 8% today..

[matty77]

still on my watchlist, anyone have any analysis at the moment, FY reports just in...

[skc]

still on my watchlist, anyone have any analysis at the moment, FY reports just in...

24c EPS so @ $4 WTF is trading at 16.7x PE. Pretty expensive for a company that didn't grow profits this year. Question is where is the growth going to come from to justify the high PE. If there isn't growth the market will continue to de-rate the stock probably down to PE 10 or 11. FLT and WEB are both good comparables and they trade at ~12-13x PE. That's the possible downside target in the short term imo.

On a fundamental business level it's hard to see WTF having a great deal of "moat" around their business. Their rooms are not always the cheapest and you have global players like Expedia and others fighting on their turf...

[McLovin]

24c EPS so @ $4 WTF is trading at 16.7x PE. Pretty expensive for a company that didn't grow profits this year. Question is where is the growth going to come from to justify the high PE. If there isn't growth the market will continue to de-rate the stock probably down to PE 10 or 11. FLT and WEB are both good comparables and they trade at ~12-13x PE. That's the possible downside target in the short term imo.

On a fundamental business level it's hard to see WTF having a great deal of "moat" around their business. Their rooms are not always the cheapest and you have global players like Expedia and others fighting on their turf...

I agree about the pricing, they have specials which can be good value but for general booking I never use them (and I travel a fair bit). I can't see any moat either, the high RoE is a function of their business model not the business itself. Like a fund manager.

[skc]

I agree about the pricing, they have specials which can be good value but for general booking I never use them (and I travel a fair bit). I can't see any moat either, the high RoE is a function of their business model not the business itself. Like a fund manager.

Not sure how to interpret that... but with the shareprice at 10x book value the high ROE exists on the balance sheet only and not for the investor's dollar.

[McLovin]

Not sure how to interpret that... but with the shareprice at 10x book value the high ROE exists on the balance sheet only and not for the investor's dollar.

I mean the only reason the company has a high RoE is because any web business is usually people power intensive, and not much in the way of real assets on the BS. Often a high RoE can be an indicator of a moat, but not in this case.

[skc]

I mean the only reason the company has a high RoE is because any web business is usually people power intensive, and not much in the way of real assets on the BS. Often a high RoE can be an indicator of a moat, but not in this case.

This makes sense. I was just nitpicking your choice of words (business model vs the business itself).

[McLovin]

This makes sense. I was just nitpicking your choice of words (business model vs the business itself).

All good.

[Bazmate]

WTF is going on here.... share price down ~10% in two days after announcing a rise in profits of ~10% ?? Now I'm confused... and unhappy.

[Vesupria]

WTF is going on here.... share price down ~10% in two days after announcing a rise in profits of ~10% ?? Now I'm confused... and unhappy.

Earnings growth does not always equal share price growth. You need to remember that if the market expects higher earnings growth than is reported, and all other things are equal, the share price is going to head south to factor this in.

[McLovin]

WTF is going on here.... share price down ~10% in two days after announcing a rise in profits of ~10% ?? Now I'm confused... and unhappy.

16x earnings is quite full for a company that's expecting FY growth of between 9-13%. It's possible WTF best days of growth are behind it and PE is compressing; refer JBH.

[pavilion103]

This is one I'll certainly be keeping track of in the short term.

It has bottomed on much higher volume and then found a lower high on what looks like a bit of a shakeout.

The lowest volume today in a little while. I might even consider entry above $4.15. Have to look at it a bit more over the weekend.

Are others bullish or bearish on this one?