Expedia and Priceline will be just fine

Both Expedia (NASDAQ:EXPE) and Priceline (NASDAQ:PCLN) shares are trading near 52-week lows, it's as if investors think these companies and the U.S. economy will never travel again?  Be reasonable.

From a P/E perspective, Expedia is currently cheaper, trading with a P/E of 7.20 and shares are in the mid $7 range.

Priceline is a bit more expensive, shares are at $50 trading with a P/E of 12.69.  But nobody cares about where they are trading today, the question comes down to when will the travel industry make a comeback?

As Eric Cheshier from theStockMasters.com points out:

When it comes to online travel, it comes down to both Expedia and Priceline. This period of uncertainty in the travel industry should result in some consolidation of the online players. There are thousands of online travel sites out there - many of which will not be able to stay afloat in the midst of the credit crunch and the downtrend in the economy. Less competion should benefit Expedia in the long run. 

Consolidation is the key and going with Best of Breed online travel players, its Expedia and Priceline, the end. 

Since the beginning of the third quarter, Expedia and Priceline shares have lost more than 50 percent each.

Priceline has now beaten Wall Street guesstimates in 10 consecutive quarters, they are the stronger of the two if you are looking for less risk.

The charts of these two companies reflect what's happening with our U.S. economy and it's no brainer, with less money to go around, less people are traveling and taking vacations.

Expedia Inc, the largest online travel agency, reported a decline in quarterly net profit last month and acknowledged that economic turmoil caused a "broad pullback" in travel spending in September and October.

Priceline.com also reported smaller net quarterly profit and predicted fourth-quarter profit slightly below Wall Street estimates, citing the economic slowdown.

"Given the outlook for the general economy, we are forecasting a significant reduction in U.S. dollar-denominated international gross booking growth rates," Priceline Chief Executive Jeffery Boyd said on a conference call last week.

Think long term investing, sure these stocks could keep heading down, but the bottom is close.

Disclaimer: No positions in any of the securites mentioned in this publication.