Hedge Funds Are Crazy About Expedia Inc (EXPE)

Let’s now take a look at Expedia Inc (NASDAQ:EXPE)’s performance over the past several years. The online travel company generated revenue of $6.67 billion in 2015, up from $5.76 billion in 2014 and $4.77 billion in 2013. The company’s bottom-line results have also been improving over the past few years, with 2015 net income increasing to $722.75 million, up from $372.95 million in 2014 and $216.36 million in 2013. The fast-increasing usage of the internet globally has stimulated the exceptional growth in the online penetration of travel bookings. For instance, Expedia Inc (NASDAQ:EXPE)’s gross bookings reached $60.83 billion in 2015, significantly above the $50.45 billion registered in 2014 and the $39.44 billion in 2013. The increase in worldwide gross bookings was mainly driven by the strong performance of Brand Expedia and Hotels.com, as well as new acquisitions. Nonetheless, the company’s revenue margin has been trending downwards in the past few years due to lower revenue per room night. The revenue margin declined to 11.0% in 2015 from $11.4% in 2014 and 12.1% in 2013.

What have hedge funds been doing with Expedia Inc (NASDAQ:EXPE)?

At Q4’s end, a total of 73 of the hedge funds tracked by Insider Monkey were bullish on this stock, a rise of 18% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Paul Reeder and Edward Shapiro’s PAR Capital Management has the most valuable position in Expedia Inc (NASDAQ:EXPE), worth close to $471.5 million, corresponding to 8.7% of its total 13F portfolio. The second most bullish fund manager is Altimeter Capital Management, led by Brad Gerstner, holding a $379 million position; 20.8% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism contain Philippe Laffont’s Coatue Management, Israel Englander’s Millennium Management, and D.E. Shaw & Co. L.P., founded by David E. Shaw.

Consequently, key hedge funds have been driving this bullishness. Calixto Global Investors, managed by Eduardo Costa, assembled the most outsized position in Expedia Inc (NASDAQ:EXPE). Calixto Global Investors had $17 million invested in the company at the end of the quarter. Joseph A. Jolson’s Harvest Capital Strategies also made a $15.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Adam Bernstein, Mark Hoffman and Glenn Vogelman’s Pagoda Asset Management, Robert Hays’ Ashford Investment Management, and Solomon Kumin’s Folger Hill Asset Management.

On the final page, we’ll compare Expedia’s popularity to stocks with a similar market cap.