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

[setravis]

"TZOO" Threads have been Merged.
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52wk Range: 19.53 - 52.99
Volume: 157,089
Avg Vol (3m): 357,419

Technicals
Last Price Quote is:
0.58%above 13-day MA
5.30%above 50-day MA
RS Rating: 83 

Fundamentals
Earnings Expected on Apr 17

Key Data:
Market Cap (M): $419.08 
P/E Ratio: 39.61 
PEG Ratio: 1.465 
Next Earnings: 04/17/2007
Last Analyst Rating: Strong Buy
 

Here is today's chart.......

[David Randolph]

TZOO came up on my Metastock technical filter and I was positively surprised by its fundamentals, especially the way the company's management has been buying back shares, therefore reducing the # of shares outstanding. I also appreciate the continuous net profit margin expansion.

Here's the video analysis I made for TZOO:

The valuation model shows the following picture:



TZOO isn't an explosive pick, but I'm expecting it to return 41.5% a year going forward if I buy it today. And that's my plan.

Trading plan:

Buy TZOO, 6.66% of capital as always.

[David Randolph]

TZOO will release Q1 results next Tuesday:

• Travelzoo Q1 2007 Earnings Conference Call Tuesday, April 24, 2007 at 5:00 PM ET
Business Wire (Fri, Apr 13)

And I love the following news:

• Travelzoo Opens Office in Hong Kong
Business Wire (Wed 6:38pm)

Global expansion is precisely what TZOO needs to keeps those revenues growing at a torrid pace. Now, maybe I'll have to increase my revenue CAGR estimate and lower my net profit margin estimate, according to what I can read on this Hong Kong press release. But I'll wait for the Q1 results next Tuesday.

I'll continue holding TZOO.

[David Randolph]

Unfortunately TZOO couldn't breakout above the $40.1 resistance level and it went down 4.43% today. Why do I always start losing? I don't know, maybe because of my technical filter that captures stocks that are bullish, and by being bullish they can be short term overbought.

Anyway, I'm not going to change the way I buy stocks, because, overall, the Main Portfolio is up 19.1% in 2007, and this main mean it will end the year at about 40% plus which would be a great year by all means.

My valuation model says TZOO will be worth a lot more than current price. I'll keep holding TZOO as the stock approaches ascending technical support.

[soxguy]

Could it be this stock is temporarily under $40 due to options expirations, which is today? I own ebay and Cramer thought it was being held under $35 till after the April 35's expire. Just my two cents.

[David Randolph]

Could it be this stock is temporarily under $40 due to options expirations, which is today? I own ebay and Cramer thought it was being held under $35 till after the April 35's expire. Just my two cents.

I don't see a fundamental reason for TZOO to be down, so it can be related to options expiration. If that's the case the stock will rebound strongly next week.

Thanks soxguy

[usedcasting]

No Biggie!

Downgrade

Travelzoo    TZOO    First Albany    Strong Buy » Buy

uc.

[soxguy]

In at 36.84. As always we shall see. Earnings will move this big time,hopefully in the right direction.

[soxguy]

Downgrade the surest way to keep this down today until after options expire. Sometimes it just makes one wonder.

[David Randolph]

We still need to wait for TZOO's 1Q results to get a better picture of the short term evolution of net profit margin, but perhaps investors are reacting negatively to what the company said on its latest press release:

• Travelzoo Opens Office in Hong Kong
Business Wire (Wed, Apr 18)

"The opening of an office in Hong Kong kicks off the launch of our new Asia Pacific business segment. We plan to invest significantly in the Asia Pacific region. While we expect our launch in the Asia Pacific region and our continued expansion in Europe to have a negative impact on our operating margins in the near term, we also see a lot of upside potential in building a global media brand," said Travelzoo Chairman and Chief Executive Officer, Ralph Bartel.

Net profit margin was 24.3% in Q4 2006 (and 23.2% for the full year), and on my valuation model I expect 30% net profit margin in 2009. Perhaps these investments in Europe and Asia will lower net profit margin to 20% or so over the short term, but I believe I shouldn't change my long term view of the company since the company is investing to deliver growth and more long term profitability for shareholders.,

My valuation model says TZOO will be a $112.69 stock in 2009, delivering 44.74% share price compound annual growth rate, so I'll keep holding TZOO. Technically the stock is trading around medium term support now.

[wxmang]

I just thought I would mention this before earnings come out tomorrow....
MoooHaaaHaaa!

Have any of you looked at the TZOO chart just "after" the 1st Quarter 2006 Earnings had been released???
David, have you seen it?
I think you will find it very interesting.
And while you are at it, check out what happened "after" the 1st Quarter 2004 Earnings.

http://finance.yahoo.com/charts#chart2:symbol=tzoo;range=2y;indicator=split+volume;charttype=line;crosshair=on;logscale=on;source=undefined

Tzoo almost tripled after the 1st quarter last year.

I know the past doesn't always predict the future, but TZOO could be full of earnings growth surprises tomorrow

Does anyone have "recent" short interest on TZOO?
I think Yahoo is incorrect.
I see why this stock gets propelled

We'll have to wait and see!

Wxmang

[David Randolph]

Have any of you looked at the TZOO chart just "after" the 1st Quarter 2006 Earnings had been released???
David, have you seen it?
I think you will find it very interesting.
And while you are at it, check out what happened "after" the 1st Quarter 2004 Earnings.

Yes, I've seen it, TZOO had huge reactions to earnings in the past:



It doesn't mean it will happen now, it depends on the news.

Q1 2007 earnings will be out today after the close:

• Travelzoo Q1 2007 Earnings Conference Call Tuesday, April 24, 2007 at 5:00 PM ET
Business Wire (Fri, Apr 13)

Let's check analyst's expectations for this quarter:



32 cents EPS on $20.39 M revenue estimate. This means a 20.44% revenue growth from Q1 2006 levels (revenue was $16.93 M back then). My long term estimates call for revenue growth of 30%:



I believe analysts are too pessimistic on their forecasts and the company will beat estimates. We'll know about that today, but one quarter doesn't make a full year.

Does anyone have "recent" short interest on TZOO?
I think Yahoo is incorrect.

My fundamental data service says there are 2,204,364 shares short as of 2007/03/12 and that the free float is 7,525,550, so 29.3% of the free float is sold short.

I believe in TZOO's business and its long term prospects, I'll hold TZOO through today's earnings release.

[soxguy]

This stock is acting just like syx before that one reported earnings and went from $13 to $30. Let's hope for similar results.

[David Randolph]

Earnings are out. They were below expectations:

• Travelzoo Reports First Quarter 2007 Results
Business Wire (Tue 4:30pm)

I'll listen to the conference call and will adapt my valuation model to this information when I make TZOO's update later in the day or tomorrow before the open.

[wxmang]

That really sucks
Oh well....
Thank God we only own 6.6%