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An Audacious Pick for Your Watchlist

Brian Stoffel
April 11, 2011

Before telling you about this stock, I have to warn you: It's not for the faint of heart.

Fool co-founder David Gardner has made a career out of bucking conventional wisdom in his Rule Breakers newsletter, and bucking conventional wisdom is exactly what I'm doing today. If you have the stomach and fortitude of a Rule Breaker, then Travelzoo (Nasdaq: TZOO  ) deserves a place on your watchlist.

You mean the company that always spams my inbox?
OK, I'll admit it: I, too, thought the fact that this company was publicly traded was a joke. But time and again, it has shown up in my screens for the Next Rule Breaker. In fact, one of the criteria David uses in evaluating his stocks is that they should have a documented history of being viewed as overvalued. With a P/E approaching triple digits and a CAPS rating of just one star, Travelzoo definitely fits that bill.

The other five signs of a Rule Breaker
Upon closer examination, we'll see that Travelzoo has more than just one of these Rule Breaking characteristics.

  1. Top dog and first mover in an important, emerging industry.
    I used to think Travelzoo played second fiddle to travel site (Nasdaq: PCLN  ) . In reality, though, I was comparing apples to oranges. priceline has positioned itself as a portal where customers and providers can bargain on prices, much th