Bullish Trade on Orbitz

Orbitz Worldwide (OWW) is currently trading at $7.40, and has a 52 week range of $5.86 - $13.26, and has a low P/E of 5.16.  Orbitz is an online travel booking service and caters to consumers as well as business customers for booking and managing travel.  

OWW has showed healthy growth both in their top line revenue, and in 2013 net income which was almost 20% of revenue.  Margins are very healthy in this business according to their latest P&L.  OWW also announces earnings on this coming Monday, May 5th.

Relative to its peers it trades at a steep discount when you compare it to Trip Advsior (59) and Priceline (32).

We like the long story in OWW, and are buying the August $7.50 Calls for $1.00.  If the stock moves higher we will make money on our calls, but if it moves lower, we will lose value in our call options.  The most we can lose on this trade is our initial investment, we still have plenty of time before expiration so if this trade moves against us, we should cut our losses quickly.  The probability analysis shows a 33% probability that OWW trades above $8.15 by August expiration.