Takeaway: PE holders selling at a low price, an executive leaves, February month data a smidge light

It is a little bit strange that PE investors are deciding to unload 5% of Sabre right after a strong earnings and analyst day that shines the light on an improving path ahead. 'They know the business better than I do and they are selling' is an easy and common logic to be applied by PMs. 

We know the Short case on Sabre fundamentals quite well. We know where that path leads, and would be articulated as: a) more work required to match costs with look-to-book pressure in TN, b) AS now run by a strong technologist but there is more discovery and work ahead to turn it around, and c) Hotels will run out of growth room by 2019 unless the division can win another strong installation. 

In addition, the company still has about ~$950m of exposed floating rate debt which could provide additional drama around market inflections. 

We think the downside risks, if true, would put the stock back at the bottom of our valuation range at ~$18. 

But the upside case is better: there is one new CEO + two new technologies now being put in place to effect a change in Sabre's rate of won/loss across the board and that increase the company's ability to serve customers with the best possible product and solution. 

How great is it that when I challenged the new head of AS offline, for example, about a land and expand strategy to win the PSS at major potential customers, he noted that with the current set of software product opportunities he can win for a long time before needing to conquer major new PSS territory. Fantastic. 

We like Sabre Long. The CAO's departure + light February travel data are normal stones on the path, and we remain above Street on revenue and FCF for 2018. The stock will be down on news of the 5% coming to market — we think it is a buying opportunity.