In March of 2014 the S&P-500 (NYSEARCA:SPY) stood at 1800 and few questioned the validity of the bull market. At the same time, TripAdvisor (NASDAQ:TRIP) was trading at $108.00, and had seen a 350% run since its IPO in 2012. TripAdvisor was seen as a must own stock which had significantly outperformed the market, and was even compared to Priceline(NASDAQ:PCLN) by one writer. Since March of 2014, Priceline and TripAdvisor have clearly diverged. While Priceline has seen a 5% increase in its share price, from $1360 to $1,430, TripAdvisor has seen a 43% decline. The stock has fallen from $108.06 to $61.31, and has been nearly halved. The below chart shows this very clearly, while both stocks rallied strongly before topping in 2012, Priceline has traded in a range up until this year while TripAdvisor has slipped into a clear downtrend. Unfortunately for TripAdvisor investors, the stock has become a consistent under-performer when compared to the market, with no bottom in sight. Despite the company reporting year over year revenue growth, their annual earnings continue to flounder. This can be attributed to expenses that continue to climb which are overshadowing their slight revenue beats. Despite revenue growing at roughly 20% a year, sales and general and administrative expenses are growing at over 40% annually. I believe the worst is yet to come for TripAdvisor, and recommend shorting the stock at current levels.
Boston
