Tuesday, January 20, 2015

Orbitz Worldwide (OWW) Stock Surging Today on Sale Speculation

NEW YORK (TheStreet) -- Shares of Orbitz Worldwide Inc. are higher by 8.84% to $9.97 on heavy volume in late afternoon trading on Tuesday, as Bloomberg is reporting that the company is exploring the possibility of a sale. The online travel agent that runs the websites Orbitz.com and Cheaptickets.com is said to be working with a financial adviser and reaching out to potential buyers, sources told Bloomberg. The sources also said that a few private-equity funds and Internet companies have shown interest in Orbitz. The sources did not name the potential buyers. Exclusive Report: Jim Cramer's Best Stocks for 2015 STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. Orbitz is looking for a buyer as Bloomberg's data is estimating the company will report record revenue of $932 million this year, due to a rise in U.S. travel. So far today, 5.22 million shares of Orbitz have exchanged hands, as compared to its average daily volume of 1.42 million shares. Separately, TheStreet Ratings team rates ORBITZ WORLDWIDE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation: "We rate ORBITZ WORLDWIDE INC (OWW) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and feeble growth in the company's earnings per share." Highlights from the analysis by TheStreet Ratings Team goes as follows: OWW's revenue growth has slightly outpaced the industry average of 12.9%. Since the same quarter one year prior, revenues rose by 14.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. Compared to its closing price of one year ago, OWW's share price has jumped by 28.22%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year. The gross profit margin for ORBITZ WORLDWIDE INC is currently very high, coming in at 80.39%. Regardless of OWW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.57% trails the industry average. The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 30.4% when compared to the same quarter one year ago, falling from $12.98 million to $9.04 million. The debt-to-equity ratio is very high at 8.20 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, OWW has a quick ratio of 0.54, this demonstrates the lack of ability of the company to cover short-term liquidity needs. You can view the full analysis from the report here: OWW Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.


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