Jefferies Cuts Expedia Stake by 62.4%, Trimming 55,918 Shares

Jefferies Financial Group cut its Expedia Group holdings by 62.4% in the third quarter, selling 55,918 shares and leaving 33,645 shares worth $8,861,000, according to its most recent SEC filing. The sale stands out mostly for its size. Most other institutional investors spent the same quarter adding.

Who bought what in the third quarter?

Holdings Channel data show a broad institutional tilt toward accumulation. Institutional investors own 90.76% of Expedia's stock, which makes their filings a reasonable proxy for sentiment.

• First Command Advisory Services boosted its position by 352.5%, buying 416 additional shares to reach 534 shares worth $141,000.
• Illinois Municipal Retirement Fund added 2,657 shares, a 2.7% increase, and now holds 102,842 shares worth $27,084,000.
• Lido Advisors raised its stake by 67.3%, buying 3,442 shares to hold 8,555 shares worth $2,253,000.
• D Orazio & Associates increased holdings by 5.3%, adding 74 shares for a total of 1,465 shares worth $386,000.
• 71 West Capital Partners lifted its position 3.2% with 36 additional shares, holding 1,169 shares worth $308,000.

The pattern is unambiguous. Jefferies trimmed while nearly everyone else on this list bought.

How did the quarter look on fundamentals?

Expedia reported quarterly results on Wednesday, November 4th that beat on both lines. Earnings per share came in at $9.39 against analyst consensus of $8.85, a $0.54 beat. Revenue reached $4.94 billion versus expectations of $4.73 billion, and revenue rose 11.9% year over year from a quarter that produced $7.57 in EPS.

Profitability metrics were strong. The company posted a return on equity (net income as a share of shareholder equity) of 91.03% and a net margin of 12.98%. Analysts as a group expect full-year EPS of 17.37, according to consensus forecasts.

What are the shares trading at?

Shares opened at $259.79 on Thursday, up 2.4%. The stock trades above its 200-day moving average of $259.23 but below its 50-day moving average of $278.24. The fifty-two week range runs from $185.34 to $342.00.

Valuation and balance sheet measures:

• Market capitalization: $31.18 billion
• P/E ratio (share price divided by trailing earnings): 15.17
• Price-to-earnings-growth ratio: 0.60
• Beta (sensitivity to market moves): 1.39
• Debt-to-equity ratio: 1.62
• Quick and current ratios: both 0.77

A debt-to-equity ratio of 1.62 with liquidity ratios of 0.77 suggests leverage the market has accepted, at least while earnings cooperate.

Dividend and insider sales

The board declared a quarterly dividend of $0.48 per share, payable Thursday, December 10th, to stockholders of record on Wednesday, November 18th. That annualizes to $1.92, a yield of 0.7%, with a dividend payout ratio (share of earnings paid as dividends) of 11.21%. Modest, but real.

Insiders have been selling. Robert Dzielak sold 1,004 shares on Monday, August 24th at an average price of $335.00, totaling $336,340.00 and reducing his ownership by 0.95%; he retained 104,331 shares worth $34,950,885. CAO Lance Soliday sold 2,810 shares on Tuesday, August 18th at an average of $323.65, a $909,456.50 transaction that cut his stake by 18.97%; he kept 12,006 shares worth $3,885,741.90. Over the last three months, insiders sold 5,814 shares worth $1,906,796. Insiders own 5.20% of the company.

What do analysts say?

The ratings picture is mixed. Recent moves:

• Piper Sandler reiterated a neutral rating on November 5th and raised its target to $335.00 from $325.00.
• Wells Fargo lifted its target from $275.00 to $278.00 with a cautious rating, also November 5th.
• Wall Street Zen downgraded the stock from buy to hold on November 7th.
• Morgan Stanley cut it from equal weight to underweight on September 16th, with a $235.00 target.
• Rosenblatt Securities initiated coverage on September 1st with a neutral rating and a $360.00 objective.

Fifteen analysts rate the stock a Buy, nineteen a Hold and two a Sell, producing a consensus rating of Hold and a consensus price target of $316.00, per MarketBeat. A beat quarter, insider sales and a Hold consensus: the market, it appears, is content to wait.

Expedia Group, founded in 1996 as a Microsoft division and public since 1999, operates Expedia, Hotels.com and Vrbo, connecting travelers with lodging, flights, rental cars, cruises, vacation packages and activities, and supplies travel technology and booking services to business partners.