TZOO - Sector: Services---Industry: Internet Information Providers

[Dracull]

If she manages to hold at those levels, I'm in.
David, don't you think that after this blood, she will need to consolidate at 25$ for a while?

[David Randolph]

If she manages to hold at those levels, I'm in.
David, don't you think that after this blood, she will need to consolidate at 25$ for a while?

Yes, there's no catalyst to move it sharply higher from here. But a catalyst may happen anytime, and TZOO moves extremely fast with huge gaps (well, I guess most people here know this story fairly well ).

TZOO has been launching press releases about Canada, but what would certainly spark investors interest would be news about how's Europe going. Because that's from where the growth and the losses are coming:

«Europe business segment revenue grew 128% year-over-year to $1.3 million. Europe reported an operating loss of $683,000, compared to an operating loss of $460,000 in the prior year period and an operating loss of $356,000 in the prior quarter. The $327,000 increase in the operating loss from the prior quarter was primarily attributable to increased subscriber acquisition expenses in Germany and the U.K. Travelzoo began operations in the U.K. in May 2005. In September 2006, Travelzoo launched its Top 20 e-mail newsletter in Germany.»

I think that management increased subscriber acquisition expenses because it sees return for that spending/investment, that is, it sees strong demand for its services in Europe.

I'll keep holding TZOO.

[David Randolph]

Today when I was going to check www.travelzoo.com I got the following message:



Of the company's 4 business units, only one, the US, is profitable. All other three are losing money. Now, the US unit was also unprofitable when it started in 2001. But since then, it has been growing nicely and becoming more and more profitable, with EPS rising from $0.04 in 2002 to $0.45 in 2005 and $1.01 in 2006.

I guess that since the business model worked so well in the US, it will probably work well in Canada, UK and Germany, don't you think?

If this happens, coupled with some more US growth, probably the company will double its revenues and profits. The stock price should double too.

Recently the company also started operations in Asia.

There's no risk of dilution here, since TZOO has even been buying back shares in an aggressive mode and currently has $39 M in cash.

I wonder why TZOO pays so much in income taxes, in Q1 2007 the tax rate was 48.2%. They should base their company not in New York, but in Ireland for example, since income taxes there are just 10%. TZOO is the company that pays the highest taxes I've ever seen, they should do something about it. The change of the company's location to a lower taxation country would increase its value substantially. A lot of this company's work goes to the IRS, instead of shareholders. Perhaps I'm going to write the company asking why they pay these very high taxes and why not try to change things.

I'll keep holding TZOO.

[David Randolph]

We've had a bit of a bounce yesterday on TZOO, but nothing significant from a technical standpoint. Fundamentally everything is the same as we've been discussing. A "weaker than expected quarter" doesn't mean all that much for the company's future in my view. I wish I bought TZOO here for the first time, but no, I bought it quite high and suffered.

I guess something like this may happen to any stock and to any trader and one needs to be prepared for it. That's why I have this rule of needing to hold 15 different stocks to be full invested.

I'll keep holding TZOO.

[pinoleropuro]

According to Standard & Poor's
"We have a neetral fundamental outlook on the Internet Software & Services sub-industry. Although we believe that growth opportunities are considerable for this sub-industry and its companies, we think competition is significant and increasing, with online bellwethers, traditional companies, and Internet start-ups all trying to gain market share. As a result, aggressive associated investment by the sub-industry constituents is somewhat restraining upside to their fianncial results and guidance, in our opinion...
Year to date through May 18th, the internet Software & Services index rose 7.3% versus a 7.7% increase in the S&P 1500. In 2006, the indes fell 18.6%, notably underperforming the 13.3% gain posted by the S&P 1500...
Wall Street Consensus Opinion HOLD...
For fiscal year 2007, analysts estimate that TZOO will arn $1.11. For the 1st quarter of fiscal yar 2007, TZOO announced earnings per share of $0.25, representing 23% of the total annual estimate. For fiscal year 2008, analysts estimate that TZOO's earnings per share will grow by 23% to 1.36."

[David Randolph]

For fiscal year 2007, analysts estimate that TZOO will arn $1.11. For the 1st quarter of fiscal yar 2007, TZOO announced earnings per share of $0.25, representing 23% of the total annual estimate. For fiscal year 2008, analysts estimate that TZOO's earnings per share will grow by 23% to 1.36."

Thanks for this comment on TZOO pinoleropuro

We've had a bit of a bounce today, I wonder if it is the start of something meaningful ... I'll keep holding TZOO.

[Garoh]

For fiscal year 2007, analysts estimate that TZOO will arn $1.11. For the 1st quarter of fiscal yar 2007, TZOO announced earnings per share of $0.25, representing 23% of the total annual estimate. For fiscal year 2008, analysts estimate that TZOO's earnings per share will grow by 23% to 1.36."

Thanks for this comment on TZOO pinoleropuro

We've had a bit of a bounce today, I wonder if it is the start of something meaningful ... I'll keep holding TZOO.

yes David TZOO now is very very bullish the chart looks great now and today is a sign of a good buying chance ...

Now I can see first target is $35  I added more today for a quick 10% to 15% profit 

[David Randolph]

yes David TZOO now is very very bullish the chart looks great now and today is a sign of a good buying chance ...

Now I can see first target is $35  I added more today for a quick 10% to 15% profit

It's amazing the way you can get a clue for the future by the way a stock acts now. I guess that's because you've seen many charts in the past, and probably you've seen some that looked like TZOO's chart before having a meaningful rebound. I wish you're right Garoh.

Over the longer term, one of the main trends going on in the world right now is that people travel more and have more vacations and more money to spend on vacations. There's more people with some buying power too. A decade ago no Russian tourist would ever come to Portugal. Now there are plenty of them, it's incredible.

The internet and globalization make people meet more people from other parts of the world and travel to those parts of the world to meet the new people in person. Also, businesses from different countries talk and meet more.

TZOO is at the center of all this, and should benefit immensely going forward. There's no historical dilution whatsoever, in fact, the company has been buying back shares, so you know the value of the business is reflected by the share price. I don't have doubts that the value of the business will increase, and that the share price will rise accordingly. But it will take time, maybe years. I have time. I'll keep holding TZOO.

[realcoolhead]

TZOO is moving 

David, even though I didn't say much lately, I have been watching you intensely  I am glad that you showed remarkable calmness and strength during the latest portfolio slump, the quality of leadership we can all appreciate.

You are doing a much tougher job than those fund managers. They "hide" behind their investors while every one of your moves is scrutinized heavily by people in here. It takes a superman to remain calm and focused and not let emotion take over in a situation like this. This was not the first time, yet I can say that you grew a lot closer to that "superman" status  (Well, except for that you almost sold SILC...)

[David Randolph]

TZOO is moving

Yes, nice rally yesterday. Fizzled a bit at the end because the stock faces some technical challenges, since the technical trend, at least for now, remains bearish.

David, even though I didn't say much lately, I have been watching you intensely

I know, I know, I see when you're online. And you're following my work at the Video Portfolio too, I hope you got some of those picks

I am glad that you showed remarkable calmness and strength during the latest portfolio slump, the quality of leadership we can all appreciate.

Thanks for the nice words. I'm confident in what I'm doing (confident, but humble and open to admit being wrong), so I guess that gives me some more calm.

You are doing a much tougher job than those fund managers. They "hide" behind their investors while every one of your moves is scrutinized heavily by people in here. It takes a superman to remain calm and focused and not let emotion take over in a situation like this. This was not the first time, yet I can say that you grew a lot closer to that "superman" status  (Well, except for that you almost sold SILC...)

hehehe, yes, it's a tough job, at least when one does it honestly as I do, because no one is always right, or knows everything. It would be easier to admit mistakes if nobody else knew, than to come here and do it publicly. I believe that many fund managers managing hundreds of millions of dollars don't have the same preparation as I do, they didn't put as much of their lives and passion into this business as I did. I have not just my experience but the combined experience of all the people that were kind enough to share it with me.

Yet, I feel I need to learn a lot more. Everyday I feel like a child, thinking: "how come I don't know that?"

Anyway, enough about me, let me also say that you're the strongest hand and subscriber I've ever had. You were the first person I ever heard saying you think it would be great to earn 20% a year, on average, investing in stocks. Yet, Warren Buffet, the World's greatest investor, ever, did just a bit more than that, roughly 22% a year. You understand how results compound and the importance of time. Also, investing from the standpoint of the business, not of the stock.

So thank you for your continuous support!

Coming back to TZOO, we had a rally, that seems like the start of a rounding bottom. Time will tell. Long term fundamentals are very attractive. I'll keep holding TZOO.

[realcoolhead]

I did. In fact I bought all of them as soon as you recommended over there.  You know I wished that your portfolio to have 25 stocks, so now it is getting closer 

You gave me too much credit ... let's just say the whole experience here is for us both to get our hands stronger, much stronger than before. 

I know, I know, I see when you're online. And you're following my work at the Video Portfolio too, I hope you got some of those picks

Anyway, enough about me, let me also say that you're the strongest hand and subscriber I've ever had. You were the first person I ever heard saying you think it would be great to earn 20% a year, on average, investing in stocks. Yet, Warren Buffet, the World's greatest investor, ever, did just a bit more than that, roughly 22% a year. You understand how results compound and the importance of time. Also, investing from the standpoint of the business, not of the stock.

[David Randolph]

I did. In fact I bought all of them as soon as you recommended over there.

That's great because the Video Portfolio is already up 11.83%. I always start very well. Will try to remain on top.

You know I wished that your portfolio to have 25 stocks, so now it is getting closer   

Yes, the idea is to expand the Video Portfolio to 10 different holdings by the end of 2007.

You gave me too much credit ... let's just say the whole experience here is for us both to get our hands stronger, much stronger than before.

Yes, that should be the way. Initially I thought that I should study stocks much more deeply before the initial purchase to have stronger hands. But as I learn more I guess what's really needed is to study many, many different stocks, to make sure that we're holding the best of them. The buying reason usually stands on the surface ... if it is too hidden, it probably doesn't exist, besides our imagination.

If the buying reason stands on the surface, probably we didn't see it because ... we didn't look, there are too many stocks outthere for a human to keep track of them all from a fundamental standpoint. But the more, the better.

As for TZOO, another positive day. The long term fundamentals of the business and the sector seems great. Working as a marketing agent for travel agencies, airlines, hotels, rent-a-car companies, etc. Expanding a successful business model in the US to Canada, Europe and Asia. It should work. It will probably work, after the initial costly development process.

I'll keep holding TZOO.

[BigSully1]

Priceline and Europe.

http://biz.yahoo.com/ibd/070621/tech01.html?.v=1

[David Randolph]

Priceline and Europe.

http://biz.yahoo.com/ibd/070621/tech01.html?.v=1

Thanks for the article BigSully1, PCLN is growing a lot in Europe. TZOO's European operations are growing even faster (128%), but from a much smaller base.

My investment in TZOO is based on their European and Asian initiatives becoming as profitable as the company's US operations as time goes by, at least doubling the overall company's profits and price per share.

I'll continue holding TZOO.

[David Randolph]

No news out for TZOO and no new technical developments. My trading plan remains the same: HOLD.