Morningstar's Wasiolek Says Priceline is Well Positioned(Audio)

today's afternoon call with Bill Maloney. Bill, Good afternoon, Katherine. Stocks are under pressure again today. Dallas currently lower by a hundred and three points, as if you drop thirteen and NAZAC falls thirty six. The small cap six hundred is down four points, and the US ten yield falls

to one point seven eight percent. Seven out of tennis B sectors are lower, led by losses and industrials, energy and the financials, games and utility, Staples and telecom Transports falls seventy points and as a bio text are down two point eight percent and the VIX is higher by five percent. Doll Leators in the downside included Caterpillar, GE and Goldman Sachs McDonald's, Procter and Gamble, and Coca Cola

led to the upside. Some of the names supporting after de Belts and I include Test Electric Advisor, Whole Foods, MetLife, and ficked It Live in the first breaking news desk on Bill Maloney, Katherine, thank you Bill to hear live breaking news over your Bloomberg type s q U a K on your terminal. Crude oil has narrowed an earlier advance of two point eight percent after the government reported

that crude inventories rose in the US last week. West Texas Intermediate crude up twenty one cents a barrel to eighty six about gold down nine dollars thirty cents an ounce of twelve eighty two fifty and the Tenure Treasury is up six thirty seconds with the yield of one point seven seven percent. And that's the Bloomberg business flash you're listening to taking Stock with Kathleen Hayes and on

Bloomberg Radio. In the easter holiday, a lot of spending on new advertising campaigns, and weaker demand for travel to France in China. All of these hit price Line Group second quarter profit now suffering according to price Line and saying this in a statement. Investors are not in a very forgiving mood though, because price Lines share is share prices tell me the most in three and a half years.

Putting a whole lot more on Price Line Group's interim in chief executive Jeffrey Boyd, who has been back just a week reclaiming an old job that he had left. Let's bring in our next guest to bring this all together for us, Dan Musselic, senior equity analyst at morning start joining us from Chicago. So Dan, first of all, let's talk about Jeffrey Boyd, what brought him back and Boyle boy, they need all the help they can get right now? Uh? Yeah, I mean, I guess that remains

that you've seen. If they need all the health they can get, we probably we'll talk about that in a minute, but yeah, I mean, so we heard last week that the former CEO, Darren Houston, who we view as an effective CEO, had to resign for um uh conduct that was contrary to the code of Ethics. So that brought Jeffrey Boyd, who was still the chairman of price Line back as CEO at least in the interim, and as

you alluded to, he was a former CEO. He was really paramount and making price Line into the domino t a that it is today. He was the CEO from two thousand and one to two thousand thirteen, and at that time he made a big acquisition in two thousand five of Booking dot Com that really made price Line into this dominant otia that we see today. So, Danny, what do you think is it a stock worth buying right now? It's down a hundred and ten dollars, it's

down about eighty three the last print. Yeah. You know, our view, as we see this as an opportunity, price Line is a high quality company. We believe it's well positioned in a large in the large and growing online travel industry, and that it's trading at attractive valuation here. So you know, what we saw essentially was a very very strong first quarter where the key metrics we're ahead of expectations and actually superior growth to Expedia on an

organic to organic comparison. And then you know the reason the stock is down is that the second quarter guidance was quite weak and implies that there's going to be a meaningful decline in demand as well as a pickup in near term spending. Our view on that is, you know, we have several reasons to believe that that space. The weaker guidance is based more on macro and conservatism factors versus any increased competitive situation for Priceline. Speaking of competitive

why is Priceline so dominant? Is it? Captain Kirk's a William Shatner. There's so much competition in that space. You mentioned Expedient, how about Kayak? How about so many discount websites that are easy to navigate. Um, you can get all kinds affairs out there. What is Priceline doing so well? Yeah? So, I mean there's been a lot of consolidations, so Expedient and Priceline have been part of that consolidation, and they've reached reached a point in our opinion where it's really

tough for any others to compete against them. You mention and Kayak. Priceline actually acquired Kayak in two thousand thirteen, And Expedia has made a bunch of acquisitions recently, such

as Orbits. Orbits was the number three competitor before it was acquired by Expedia and really was unable to effectively compete on a marketing and technology scale that expedient Priceline are able to, so they have that scale advantage, they have you know, the network effect advantage where they have a bunch of properties and other travel supply on their

network um. And in addition to that, the reason why pricelines growth has been so strong is their focus is really more in international markets, and those international markets have hotels that are more independent or boutique versus in the US they are more made of large brands such as Hilton and Marriott and for the vet reason, and international markets, those smaller hotels really depend on the channels such as Priceline to try to drive um booking bookings to to

their to their to their hotels. What kind of margins are we talking about for these international sal and small boutique hotels you describe, Yeah, so I guess, uh, Priceline Expedia get a commission um on each hotel room that's sold, and internationally, you know, the companies don't disclose those for competitive reasons, but you know, for international markets often probably commissioned rates for hotels are probably around mid to high teams and that compares with you know, the US markets

that are more consolidated with those larger brands where those commission rates might be high single digit, low double digits. So it is uh, you know, it is a stronger economic channel to be uh well positioned in those markets.

You know, how the global economy and the macro picture, how does it look right now for hotels, for travel websites broadly because there is still concern kind of goes up and down in terms of the temperature of that concern in the markets that that there's a lot of there's a lack of demands and would say in many parts of the world. Yeah, I mean, I think there's

been two things with the with the macro environment. So the one are the terror tacks, uh, you know, the last several months in Paris and Brussels and not having some impact, but you know, barring I guess continued to tax. What we have seen historically are though those pauses are are short lived and that people you know, value travel, especially Europeans, and that they do return to travel. But that is one reason why there might be a near

term pause. And the second one is you know, economic growth, uh, you know, I guess globally and especially internationally has shown some some signs of weakening. Dan Wessiliak, Thanks very much for joining US senior equity analyst to morning Star based in Chicago. You're listening to taking Stock on Bloomberg Radio. Bloomberg taking Stock is brought to by Jaguar Manhattan. Visit

Jaguar Manhattan today, where New York goes forth luxury. Conveniently located at fifty four and Eleventh Avenue and online at Jaguar Manhattan dot com. Jaguar Manhattan is at your service. The