I know this site is named Bull Ringer and most of the time I do write about stocks in a bullish uptrend. But more importantly, this site is about making choices that will help our portfolios build. After reading a recent piece by Timothy Sykes on PokerTek, I couldn’t help but agree based on my own experience and the evidence at hand. I am an online poker player and frequent the popular forums. This past Spring Break I went on a cruise and had a chance to play on PokerPro, PokerTek’s digital poker table. The user interface was decent but the whole experience was an overall let down. If I want to play poker using a computer, I will do just that at home. The purpose of playing poker in Vegas or anywhere else is to interact with live players, dealers and to enjoy oneself in that environment. Everybody looking at a computer screen defeats this purpose. The other problem was people weren’t used to it and unless they stared at their computer screens the whole time they wouldn’t even know it was their turn to bet. Also, proponents like to say it speeds up game time. Then why not have the screen split up into 4 screens so they can play 4 tournaments at a time? Again, if your at a casino, your main purpose probably isn’t to get as many hands in as possible, its to have fun and try to make some money by studying your opposition
Fundamentally, PokerTek is flawed as well. The company has not made a dime -1.14EOS. They have been funding their tables through large loans reducing their credit and putting the company in immediate danger. The recent run up was based on some Goldman Sachs executives (not poker players) being impressed and internet message board hype. I am not sure how this company will do in the future. I guess if Casinos want to save money on labor they could keep installing these although I don’t see moderately serious player sitting down.
Technically, I think shorting this stock for the next month or so is a smart move. The recent gains in the stock price should retract to the support levels.

Note I wrote this post yesterday and it has already dropped 10%

SAN FRANCISCO (MarketWatch) — Priceline.com Inc. shares climbed to an an eight-year high on Friday before closing with a gain of 12% after the online travel site reported a first-quarter profit fueled by a rise in booking and international travel.

PCLN 138.63, +14.85, +12.0%) rose $14.85 a share to close at $138.63 and has more than doubled since this time last year and is now at its highest level since late 2000. Earlier in the session, the shares reached $143.70.

The move came after the company said late Thursday that it earned $18.2 million, or 37 cents a share, on revenue of $403.2 million. During the same period a year ago, Priceline lost $16.3 million, or 44 cents a share, on $301.4 million in revenue.
Excluding one-time items, Priceline would have earned 76 cents a share to beat the estimates of analysts surveyed by Thomson Financial, who forecast a profit of 60 cents a share on $377.2 million in revenue.
The company, best-known for its name-your-own price option for flights, has benefited from consumers searching for low-price flights at a time when many airlines are hampered by rising fuel costs.
Priceline said both its domestic and international businesses grew during the quarter. Domestic bookings rose 51% from a year ago, while international bookings doubled from the same period last year.
“The U.S. business was the big upside surprise this quarter,” Marianne Wolk of Susquehanna Financial Group said in a research note.
Wolk said that Priceline had earlier estimated its U.S. bookings would rise 35% from a year ago and that “the main driver of growth appears to be air ticketing growth” due to the company’s no-booking fee promotion that has been in place since June 2007.
For its second quarter, Priceline said it expect to report earnings of $1.25 to $1.40 a share before items, and full-year earnings of between $5.25 and $5.65 a share. Wall Street analysts had previously estimated Priceline would earn $1.29 a share for its second quarter and $5.11 a share for its entire fiscal year.
“Priceline is proving out as the most defensive ‘Net stock,” Citigroup analyst Mark Mahaney said in a research note. Mahaney raised his full-year earnings estimates on Priceline to $5.59 a share and lifted his target price on the company’s stock to $161 a share.

Priceline.com is an online booking company for flights, hotels and car rentals. Priceline is very similar to Expedia and provides comparisons for the cheapest in accommodations. Even though the recent hikes in oil prices have driven airlines to the brink of bankruptcy, it hasn’t slown down Priceline’s growth. The turnaround has been fueled by a strong US and International bookings. The last four earnings reports have exceeded expectations and raised guidelines. Even though I’ve had a poor experience with priceline when I showed up one day late and found my whole reservation cancelled, the stock looks to be a winner. Below is a chart.