WOTIF.com (WTF)

[Phaedrus]

I have WTF. It has fallen like a lead balloon. On Stocknessmonster charts I did not see any warnings.What was I missing and where should I have been looking? There were plenty of warnings, Percy, but I am not sure that any were necessarily directly applicable to longterm holders such as I think you might be.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/WTF425.gif

WTF was in a very strong uptrend and longterm holders would have been tracking this using fairly conservative indicators such as most of those depicted here. Recent weakness has resulted in multiple Sell signals being triggered, as marked by black arrows. These Sell signals were caused by the significant fall in the shareprice - they did not predict it. Their job is to alert you to the fact that this retracement is deeper and more significant than any that preceded it. You can see, for example, that drops of up to 12% were quite normal for this uptrend and if you are a longterm holder, you would not want to be flicked out of a strong uptrend by any "normal" retracement. Long-term trend followers never expect to sell at or near the top. They want out only if/when the trend weakens significantly or ends. Naturally this means giving a few percent back to the market when they sell, but after more than doubling their money in less than a year what does that matter?
Warnings. Take a look at the RSI plot and you will see a very clear "Bearish Divergence" where the price made a new high of nearly $8, but the RSI made a lower high. Divergences like this often flag impending weakness and you can see that each and every one of the 4 RSI bearish divergences shown here (blue lines and arrows) was followed by obvious weakness. Divergences such as these provide really good Sell signals for short-term traders, but such exit signals are too sensitive, too active, for those wanting to stay in for the longterm uptrend.
There were longer term bearish divergences too, as shown by the RVI (70) making a lower high while the price made a higher high as marked by magenta lines.
Candlesticks, too, showed early warnings of weakness. (See inset chart). On the day of the peak, there was a long upper shadow depicting the onset of obvious selling pressure. The next day marked the beginning of a short-term downtrend (a lower high and a lower low). This was the first of 3 black candles of increasing weakness, a formation known as "Three Black Crows". These "presage lower prices if they appear at high price levels after a mature advance" - this is exactly what was happening here. The Three Black Crows formation was followed by a "falling window" (Bearish) then another "falling window". After all of this very bearish series of patterns we got that long black candle, the big drop that broke below the trendline and triggered all the conservative trend indicator Sell signals.

[percy]

There were plenty of warnings, Percy, but I am not sure that any were necessarily directly applicable to longterm holders such as I think you might be.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/WTF425.gif

WTF was in a very strong uptrend and longterm holders would have been tracking this using fairly conservative indicators such as most of those depicted here. Recent weakness has resulted in multiple Sell signals being triggered, as marked by black arrows. These Sell signals were caused by the significant fall in the shareprice - they did not predict it. Their job is to alert you to the fact that this retracement is deeper and more significant than any that preceded it. You can see, for example, that drops of up to 12% were quite normal for this uptrend and if you are a longterm holder, you would not want to be flicked out of a strong uptrend by any "normal" retracement. Long-term trend followers never expect to sell at or near the top. They want out only if/when the trend weakens significantly or ends. Naturally this means giving a few percent back to the market when they sell, but after more than doubling their money in less than a year what does that matter?
Warnings. Take a look at the RSI plot and you will see a very clear "Bearish Divergence" where the price made a new high of nearly $8, but the RSI made a lower high. Divergences like this often flag impending weakness and you can see that each and every one of the 4 RSI bearish divergences shown here (blue lines and arrows) was followed by obvious weakness. Divergences such as these provide really good Sell signals for short-term traders, but such exit signals are too sensitive, too active, for those wanting to stay in for the longterm uptrend.
There were longer term bearish divergences too, as shown by the RVI (70) making a lower high while the price made a higher high as marked by magenta lines.
Candlesticks, too, showed early warnings of weakness. (See inset chart). On the day of the peak, there was a long upper shadow depicting the onset of obvious selling pressure. The next day marked the beginning of a short-term downtrend (a lower high and a lower low). This was the first of 3 black candles of increasing weakness, a formation known as "Three Black Crows". These "presage lower prices if they appear at high price levels after a mature advance" - this is exactly what was happening here. The Three Black Crows formation was followed by a "falling window" (Bearish) then another "falling window". After all of this very bearish series of patterns we got that long black candle, the big drop that broke below the trendline and triggered all the conservative trend indicator Sell signals.

Phaedrus.Thank you.I brought in at issue.I have sold down but thought I was getting lazy.As they have not done anything silly I will hold.As allways thank you for explaining TA.

[winner69]

Like that red trailing stop line Phaedrus

Like percy with a medium long term view I often use the ATR to monitor long uptrends .... much the same sort of concept.

For WTF the exit signal would have come at 732 (even though if you followed this religiously you probably would have been out in Feb around the 650 mark.

If WTF bottoms out around 612 or 556 we also know that magic numbers also work as well .... watch this space?

[Toulouse - Luzern]

Hi Phaedrus
Really appreciate your posts...
Thanks for the very clear explanation of bearish divergence eg RSI down while price up and the candlesticks price action ...
Rgds

[Footsie]

From a fundamental perspective this stock triggered a sell twice
1) any price over $7.00 too expensive on a p.e basis relative to growth
2) profit guidance downgrade. first sign that growth is slowing and that dynamics of the business has changed. also that management might have just lost their edge slightly.

unfortuatnely I never held WTF... but if i did....... i'd have reduced above 7.00 and be totally out now.

[Jay]

Thanks for the Update Footsie
I did watch it for awhile - as it went up and wp, then of course down it comes as mentioned above.
Was thinking about getting again when reverses, but not so sure now or what signals to look at/for.
Apart from OBV, the other inidcators would not necessarily be a guidance for a long term get in and hold ?? and certainly not for a short term trade

[percy]

What I have found most interesting is how long the uptrend stayed intact,and how poor my selling down decisions were.Worries of high PE,swine flu,competition and customer's going direct to hotels(hotels would not have to wait for a month to be paid)I am learning a lot from Phaedrus' charts.As Phaedrus has pointed out there has been a lot of volitivity with this share.I have enjoyed big profits but missed the chance to have made a lot more.

[winner69]

Went to wotif.com looking for soemwhere to stay in sydney next week prompted me to have a look at the shareprice

Geez ... it did go below $5 but making a bit of a recovery

Put back on the watchlist .... you never knwo

[percy]

Went to wotif.com looking for soemwhere to stay in sydney next week prompted me to have a look at the shareprice

Geez ... it did go below $5 but making a bit of a recovery

Put back on the watchlist .... you never knwo

I am still there well positioned for any upturn.You never know I may even be poised for it!!!'
If it is any help they just go from strength to strength,and pay a divie.As I had my capital out along time ago they are in my "wet and forget' portfolio.

[winner69]

Made a few bucks out of me today they did with their commissions

As you say percy wotif collecting money somes like money for jam .... they provide the system ... the hotels etc need them to engage with me eh

See what happens eh

[h2so4]

I really like WTF and will probably buy below $5.00.

[Sideshow Bob]

If it is any help they just go from strength to strength,and pay a divie.As I had my capital out along time ago they are in my "wet and forget' portfolio.

Better than the 'spray and walk away' portfolio...................

[percy]

Better than the 'spray and walk away' portfolio...................

We may have to start a new thread Sideshow Bob to see which is the better form of investing.Could be interesting to see if Buffett and co use either one!!!

[percy]

Made a few bucks out of me today they did with their commissions

As you say percy wotif collecting money somes like money for jam .... they provide the system ... the hotels etc need them to engage with me eh

See what happens eh
A story for you.
Mr.Jones flys from Christchurch to Auckland.
Goes to hotel "A". and asks the price of a room.Told $185 but hotel is fully booked.
Walks outside and phones his wife on his cell phone and tells her to go on line and use Wotif and book him a hotel room,which she does.
Hotel "A" has a room for $130.
Mr.Jones walks back into the hotel and says"I am Mr.Jones and I have a room booked for tonight"
"Welcome Mr.Jones we have your booking"!!!
When challenged receptionist said they had to keep a certain number of rooms aside for Wotif customers.
I hope you enjoyed the story.My broker told me it when Wotif floated.I have no idea if it is true or not!!!!!!!!!

[winner69]

Percy .... story prob true

I found a place to Sydney next week on wotif but thought naybe cheaper to book direct through the hotel .... but all booked out according to the hotel

[BRICKS]

Percy .... story prob true

I found a place to Sydney next week on wotif but thought naybe cheaper to book direct through the hotel .... but all booked out according to the hotel

AS far as the hotel is concerned the bookings come out in one print out easy for staff & hotel if you phone its more trouble than its worth anyhow you get a better rate to BOOT..

[h2so4]

Percy .... story prob true

I found a place to Sydney next week on wotif but thought naybe cheaper to book direct through the hotel .... but all booked out according to the hotel

I think Club Med is still available, I'll just have to check with my wife.:)

[Jaa]

I'm an IT consultant from a small firm with no bureaucracy but an expectation that travel costs are as low as possible. We all travel a lot and book our own hotels/flights etc.

When I started 6 years ago I was an early adopter of WOTIF but for the last year or so since a colleague put me onto them have been using ratestogo.com. Their booking fee is $1 less, their rates have been consistently lower and they give me about 1% back in rewards dollars to use for personal travel. ie win-win for my company and for me.

Also use mercure.com who have a "lowest price guarantee" as I like their two downtown Auckland hotels and they give me reward points if I book direct and there is no booking fee and sometimes free changes/cancellations. Again a win-win for my company and for me.

So the prices for 4 nights next week from Mon-Fri in Auckland for either Mercure Auckland or Mercure Windsor Auckland in order of my booking preference:

Mercure.com: $88/night
Ratestogo: $88/night + $4 booking fee
WOTIF: $109/night + $5 booking fee

Obviously, I booked with Mercure.com who seem finally to have got the concept of lowest price = lowest price! Like others I have had this conversation with there front desk staff who have no idea why people travel and would or wouldn't stay in their hotels. Its not for folded toilet paper!!

My point is that WOTIF's business model is easily copied and undermined. Unlike Seek and Trademe that both have me locked in WOTIF has no hold on me and thus the company should be trading on a more modest P/E ratio.

[Footsie]

From a fundamental perspective this stock triggered a sell twice
1) any price over $7.00 too expensive on a p.e basis relative to growth
2) profit guidance downgrade. first sign that growth is slowing and that dynamics of the business has changed. also that management might have just lost their edge slightly.

unfortuatnely I never held WTF... but if i did....... i'd have reduced above 7.00 and be totally out now.

well i was a buyer today. over reaction here back near 4.00

[upside_umop]

Have you guys considered webjet?

I notice they trade on a more conservative PE...probably due to the fact they are perceived to be more risky given the lack of (historical) diversification. As Jaa states above, others can copy the model...but could they? CAGR is higher than WTF and all importantly, they are a small company with room to grow.

WTF (I keep thinking What The F***...), get hotels onboard, and take a commission. WTF have such a hold on these hotels, that if your not in..your out of the market.

Anyway, here a spreadsheet of WEB with some historical measures. TTV still has a lot of room to grow...and they seem to have something over other booking places, given their growth rates. Check them out for yourselves. Compared against WTF, they have grown their earnings, dividends, cashflows...etc faster than WTF since WEB have been profitable. I can show you guys this too if you like...

Disc: I have a couple of WEB.

[yogi-in-oz]

:)

Hi folks,

WTF ... will be alert for some positive news and a lift in price
over the next couple of days, as a positive time cycle comes
into play ... :)

have a great day

paul

:)

=====

[winner69]

Big sell off since Xmas and company son't know why so the announcemment goes

Maybe punters worried about lack of tourists in the next year as a lot of aussies have problems fixing up their properties etc

A bit of a recovery today and at these prices may keep a closer eye on the charts

[drillfix]

Your not wrong there KW.

In fact, I am still actually waiting for summer still. Compared to the many years past, it seems it has not really happened so far. Or at least what I am used to. It feels more at times like winter on some days depending if the sun is out or not. Thankfully sun came out yesterday and a bit today still.

But once this is all over, things will move forward again and hopefully we can get some consistent stable whether along with it.

[Entrep]

Anyone think this is starting to look enticing. With a good dividend could be a nice place to park my aud I don't wanna convert back to nzd!

[percy]

I would, if you have not done so already,read a very good article in www.theage.com.au headed "US giants muscle in on Wotif,Webjet."
I found it again by going to the age and putting wotif in search.

[Entrep]

http://www.theage.com.au/business/us-giants-muscle-in-on-wotif-webjet-20140112-30oo1.html

[winner69]

Comments on this thread seem to have come true

WTF one of the worst 5 performers in the ASX200 over the last 12 months

Down 47% .... about as bad as Paladin Energy (-66%), Lynas Corp (-65.3%) Regis Resources (-43.3%). The Reject Shop (49.3%)

[winner69]

Looks ljke game over for WTF ......Expdia helping out the cause

[soulman]

Well that wasn't hard to predict :-)

Good call KW. Were you a beneficiary of this marriage?