5 Best Consumer Discretionary Stocks to Buy According to Hedge Funds

4. Booking Holdings Inc. (NASDAQ:BKNG)

Number of Hedge Fund Holders: 77

Booking Holdings Inc. (NASDAQ:BKNG) is trading higher after the company recently posted strong Q2 results, helped by a boost in leisure travel demand. Booking Holdings Inc. (NASDAQ:BKNG)’s adjusted EPS in the period came in at $37.62 beating estimates by $8.46. Revenue in the quarter jumped 27% year over year to $5.5 billion, surpassing estimates by $330 million. Room nights booked jumped 9% in the quarter on a year-over-year basis.

In the latest earnings call, Booking Holdings Inc. (NASDAQ:BKNG)’s management talked about its expectations for Q3 and full year:

“We expect Q3 sales and other expenses as a percentage of gross bookings to be about 20 basis points higher last year primarily due to higher gross bookings mix. We expect our more fixed expenses in Q3 to grow year-over-year about 30% due to higher personnel and related expenses, higher IT expenses including the impact of phasing from Q2, and higher indirect taxes in G&A. The year-over-year growth in our more fixed expenses includes about seven percentage points from changes in FX. The difference between the 20% growth in our more fixed expenses in Q2 and a 30% growth in Q3 is driven mainly by FX and major one. Taking all into account, we expect adjusted — we expect Q3 adjusted EBITDA to be around 20% higher than last year. Given the strong level of bookings that we’ve seen, we are updating our commentary for the full year.

We currently expect gross bookings to grow slightly over 20%, up from our previous expectation for low teens growth. We expect full year room night growth in the mid-teens and constant currency combination ADRs were up slightly for the year, including a couple of points of pressure from changes in regional mix. We currently expect revenue as a percentage of gross bookings to increase year-over-year by about 20 basis points down from our previous expectation of 50 basis points increase. The reduction in our full year take rate is driven by less of a benefit from timing including due to the higher growth rate we expected earlier in this year and also due to expanded booking window. Also, from stronger performance, which drove a higher mix of flights than expected earlier in the year.”