'APE' Is The New 'FANG', But What Is 'APE'?

Investors are likely familiar with the "FANG" acronym, perhaps even bored with the constant attention the technology group is getting. If that is the case, investors might find the latest group interesting and may well want to monkey it. Welcome, "APE."

Speaking to CNBC from the sidelines of the Code Conference, Altimeter Capital's CEO Brad Gerstner explained that the "FANG" trade is a "highly consensus investment choice" that does offer exposure to "fantastic" companies. But none of these companies derive a majority of business within the $1 trillion a year travel sector but privately-held Airbnb, Priceline Group Inc PCLN and Expedia Inc EXPE most certainly do.

Plenty Of Room To Grow

The three companies combined account for just a 10 percent penetration of the global travel sector, which implies there is plenty of room ahead for growth, he explained. Meanwhile, the three companies account for just 1.2 billion of the total 20 billion occupied hotel rooms on a global basis.

Gerstner did acknowledge he is an investor in all three names as he believes there is a multiyear growth trajectory in which the companies can grow from a collective enterprise value of $150 billion to as much as $400 billion in enterprise value.

Finally, Gerstner did note that Alphabet Inc GOOG GOOGL does make billions of dollars in the travel sector by facilitating transactions which ultimately end up in the hands of Priceline or Expedia. But at the end of the day, it won't be in Alphabet's interest to push further down the channel as the company is happy to play a part in the top-of-the-funnel search to these players.