Tomahawk, WI 8/14/2013 (Basicsmedia) – As an online global travel company offering its services across all nations, Orbitz Worldwide Inc. (NYSE:OWW) has been performing remarkably well in the stock market. The company operates three brand portfolios which include Orbitz, Cheap Tickets and the Away Network in the Americas, as well as the e-bookers which caters for its European market, and the Hotel Club together with the RatesToGo which is for the Australian market. The company offers all these services and products globally. Is it profitable enough to offer the best return on investments?


This chart shows OWW’s revenue, net income and profit margin trends from 2012-2013.

It is from

Latest Development Affecting OWW

The one worry for investors in this company is whether they are really able to get their money’s worth now that the sector is faced with severe challenges. Recently the company went through a shocking experience when one of its major shareholders, PAR Capital Management Inc, decided to sell almost a third of its total shares it held with OWW. Inevitably this development affected the company’s share price, and led to a lot of speculations where industry experts and financial analysts started wondering why PAR chose this path, especially at this time.

Why Would PAR Sell Its Shares?

It is almost difficult if not impossible to speculate as to the real reasons behind the decisions by any major shareholder to do sell a third of its investments in any company. One of the reasons behind PAR’s decision to sell a third of its shares in OWW could be nothing more than the need for diversification. Alternatively, it could be an indication that the company intends to make some profits from the shares it holds in OWW. The third reason is that the company may have realized that OWW is not as profitable as it should be, and is probably headed for a fall.

Is OWW Really Headed for Rough Times?

Its not easy trying to tell with a degree of certainty as to the direction any business will take in the next quarter or financial year. One can only learn from the industry, and compare what is going on between similar companies. In this case, it’s good to compare OWW with its competitors such as Inc (NASDAQ: PLCN) and Expedia Inc (NASDAQ: EXPE). Where OWW has seen an increase of almost 200%, PLCN has only managed 70% gain, while EXPE has seen a fall of around 8%. Therefore, this shows OWW is in relatively good shape.

A close observation at how online travel companies are performing will show that they are in a relatively good shape financially. The industry is experiencing a lot of growth where most people now prefer to use their services due to the convenience which they provide. Moreover, among all the companies, including those which have been mentioned here, OWW continues to perform better than the rest. Therefore, this obviously leads us to conclude that PAR decided to sell its shares in Orbitz because it is the best performer. It left its shares in EXPE and PCLN intact.

It should not be forgotten that PAR also holds shares with both EXPE and PLCN, but they are not performing to the same level as OWW. It is also important to add that the company’s shares with the other two online travel firms are not anywhere near what it holds at OWW. In my view, there is no reason for fear or apprehension, since OWW isn’t headed for rough times, yet.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.