I started following this company a week ago, after successfully completing travel booked on Travelocity. The best travel service imaginable, on OR off line. For any who have never used the service, it is easy to use, offers the best prices(beat two local agents and NW Airlines own web site), also displays a diagram of the model aircraft you will be flying with open seats marked in green for you to select. My E ticket arrived in 3 days couched in a slick carrier bearing the Yahoo and Travelocity logos. Definitely inspired confidence in me as a consumer. I can't imagine anyone having the type of consumer experience I had, and not at least checking Travelocity first before purchasing tickets elsewhere. Enough said about the quality of the online service. I want to disclose that I am not associated with this co in any way except for considering becoming a shareholder at this point.
One of my big questions is whether Travelocity/Sabre has a piece of the advertising revenue from the website or if Travelocity is just acting as a contractor/service provider for Yahoo. If Sabre does have a piece of that pie, I feel it is tremendously undervalued at this time. I am as certain as one can be that the traffic on the travelocity web site will grow exponentially. As I watch Yahoo,Excite, etc make enormous gains based on # of web hits I feel strongly that while Sabre's current stock price may be a realistic valuation of it's core business in the past, it does not reflect any value added by the web related business. Let's face it, an information services company that makes commisions in a cyclical business is not all that glamorous, but, an internet company with millions of hits per day, actual revenues, exper'd management, and $400 million in cash is just what today's market drools over.
I am also interested in the very low avg volume on this issue, only 100k shares per day. Note what approx 1 million shares traded did to the price in the past two weeks before the vol dropped to normal. I'm not a TA expert but this seems very bullish to me. Could it have been part of the co's stock repurchase plan prior to a heavy marketing push of their web business? Just a thought. If this issue catches the eye of investors following the internet stocks, I feel the increased volume will have a significant price impact. I don't forsee many longtime shareholders selling out just as the ride begins. Shares will be scarce IMHO. Likewise, I don't think AMR would have any reason to dump their B shares, at least until they have participated in a significant runup. Any investment bankers here care to share their analysis of a potential Travelocity spinoff? From a purely stock players point of view, this would seem to be the best way to capture
the premiums placed on internet cos by today's investors without being held back(as much) by the cyclical nature of the travel business.
Sorry for being longwinded, but I am very excited about this co, and am wondering when it will be discovered by the market.
I'll probably have a long position within the day. Luck to all.
Markas |
