Which Top 5 Travel Stocks have the Strongest Earnings Trends?

Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

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Here’s your Cheat Sheet to how the top 5 travel stocks rank via earnings trends:

priceline.com Incorporated (NASDAQ:PCLN): Current Price $695.91

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 1,885 2,338 3,085 4,356 5,261
Diluted EPS ($) 3.74 9.88 10.35 20.63 27.66

These are exceptional numbers from priceline, and we note that revenue has jumped almost three times and EPS over seven times between 2008 and 2012…

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Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012
Revenue ($) in millions 990.77 1,037 1,327 1,706 1,191
Diluted EPS ($) 4.39 3.54 6.88 11.66 5.63

But the results in the latest quarter are highly disappointing and lead us to drop priceline from our consideration…