Stock Fundamentals

Why you should book profit in Trivago

Hari Viswanath | Updated on March 20, 2021

Investors can book partial profit in the stock of Trivago (TRVG ADR). We recommended ‘Accumulate on dips’ at $2.35 on the stock in edition dated January 10. The stock had initially dipped 10-15 per cent and subsequently rose 130 per cent. Investors who bought at 10 per cent dip would have got 130 per cent returns by now. Hence, it is prudent to book profit now.

Our recommendation was based on three main factors -- one, it will be a re-opening play; two, regulators in the US and Europe focusing on dominance and possible “unfair trade practices” by big tech, which would be positive for smaller tech firms such as TRVG; three, net cash at around 30 per cent of market cap and company being free cash flow positive have made it a value buy.While the first two points remain in play, the third factor is less the case now. With net cash now at 14 per cent of market cap after over 100 per cent upmove, downside support and value buy thesis are diminished. Hence, investors can book profits partially.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on March 20, 2021
This article is closed for comments.
Please Email the Editor