First off, welcome back to another installment of Sunday Funday, where I, Young Gun pick a fun oriented weekend stock ripe with potential. Over the past few years we have seen weakness in the consumer when it comes to dining in and out (excluding fast food, who benefited heavily from the trends of late). More recently, as the economy has stabilized over the past few years, dining has stabilized as well. OpenTable has had a short but troubled history, giving investors an initial great ride, then leaving them to the hungry wolves. Today, the company sits among the new tech comers as an established company. Investors are comfortable with the ins and outs of the reservation giant, ensuring that they will prevail in the future.
The competition “bears” a majority of the negativity when it comes to Opentable. Observing the argument, I see the competition merely nipping at the heels of a giant. There is a fear that Google may take on OpenTable, yes this is a possibility. Google, the king of technology, focuses on having its feet in every body of water, rather than having the control of the biggest piece of ocean. In simpler terms, Google is expected by investors to delve into every technology market, even if it is not going to be the leader. Obviously Google is a giant not to be taken lately, but when you take a look at the growing market OpenTable has capitalized on, the competition should be more fearing this established and growing company.
As a firm believer in the “new” technology sector, I believe this company embodies all that the future holds. OpenTable allows its users to not only be lazy, but avoids the phone calls and the challenges of making reservations. Having both risen and fallen significantly over the past few years, it allows investors to have access to the new and sleek technology space without as much of the ridiculous price action as these new tech companies that have come public in recent months. OpenTable may just be the perfect combination of growth and valuation in a sector that seems unbending through the fluctuations in the amount of diners.
Epilogue:
I prefer to point out companies before they pop 15%, obviously that did not happen. The above article has been in my Sunday Funday queue for quite some time, but with the recent destruction we have seen in the technology sector, I thought it best to avoid talking up any technology based company before they prove their merit through quartely results. Refer to On This Applelicious Day, Reminding You Investing Is Not Gambling for a more detailed analysis of why to wait until after earnings to put money to work.
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