Today’s new Top Pick for 2014 is a company sitting on top of the online rental marketplace.
HomeAway (AWAY)
from Cabot Market Letter
My top stock for 2014 is HomeAway (AWAY), the leading online marketplace for rental properties. The company had 773,000 total paid listings among its various sites (including the popular VRBO.com site) at the end of September.
Growth has been steady, thanks to the recurring yearly fees that property owners pay to have their places listed (renewal rates average 75% or so). But the big catalyst is HomeAway’s recent adoption of a pay-per-booking feature, which is likely to accelerate listings growth and attract an entirely new set of customers, especially deep-pocketed property managers that are eager for business.
The stock has come alive on the pay-per-booking release, with the shares ripping higher after sitting out this year’s bull market for eight months. With five times as much traffic as its nearest competitor, HomeAway is clearly the leader. And the flood of new business it’s sure to garner in the quarters ahead should keep big investors interested. I think the shares are set up for an outstanding 2014.
Michael Cintolo, Chief Analyst, Cabot Market Letter, www.cabot.net, 978-745-5532, December 24, 2013