Hedge Funds Are Dumping Booking Holdings Inc. (BKNG)

In this article you are going to find out whether hedge funds think Booking Holdings Inc. (NASDAQ:BKNG) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Booking Holdings Inc. (NASDAQ:BKNG) was in 96 hedge funds’ portfolios at the end of September. The all time high for this statistic is 113. BKNG shareholders have witnessed a decrease in hedge fund sentiment recently. There were 100 hedge funds in our database with BKNG holdings at the end of June. Our calculations also showed that BKNG ranked 19th among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to check out the fresh hedge fund action encompassing Booking Holdings Inc. (NASDAQ:BKNG).

David E. Shaw of D.E. Shaw

David E. Shaw of D.E. Shaw

Do Hedge Funds Think BKNG Is A Good Stock To Buy Now?

At Q3’s end, a total of 96 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from one quarter earlier. On the other hand, there were a total of 113 hedge funds with a bullish position in BKNG a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Among these funds, D E Shaw held the most valuable stake in Booking Holdings Inc. (NASDAQ:BKNG), which was worth $974.6 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $927.5 million worth of shares. Ako Capital, GuardCap Asset Management, and Alkeon Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Marlowe Partners allocated the biggest weight to Booking Holdings Inc. (NASDAQ:BKNG), around 12.83% of its 13F portfolio. Proem Advisors is also relatively very bullish on the stock, earmarking 11.24 percent of its 13F equity portfolio to BKNG.

Due to the fact that Booking Holdings Inc. (NASDAQ:BKNG) has faced falling interest from the aggregate hedge fund industry, it’s safe to say that there was a specific group of fund managers who were dropping their positions entirely in the third quarter. At the top of the heap, Daniel Sundheim’s D1 Capital Partners dumped the largest stake of the 750 funds watched by Insider Monkey, comprising close to $558.3 million in stock. Matthew Stadelman’s fund, Diamond Hill Capital, also sold off its stock, about $375.5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 4 funds in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Booking Holdings Inc. (NASDAQ:BKNG) but similarly valued. These stocks are GlaxoSmithKline plc (NYSE:GSK), Lockheed Martin Corporation (NYSE:LMT), Infosys Limited (NYSE:INFY), Prologis Inc (NYSE:PLD), Zoetis Inc (NYSE:ZTS), BP plc (NYSE:BP), and Snowflake Inc (NYSE:SNOW). This group of stocks’ market valuations are similar to BKNG’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GSK 31 1658987 3
LMT 51 1284495 -7
INFY 29 2473668 7
PLD 32 483464 -8
ZTS 58 2713394 0
BP 29 1053236 -1
SNOW 73 14569929 3
Average 43.3 3462453 -0.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 43.3 hedge funds with bullish positions and the average amount invested in these stocks was $3462 million. That figure was $8430 million in BKNG’s case. Snowflake Inc (NYSE:SNOW) is the most popular stock in this table. On the other hand Infosys Limited (NYSE:INFY) is the least popular one with only 29 bullish hedge fund positions. Compared to these stocks Booking Holdings Inc. (NASDAQ:BKNG) is more popular among hedge funds. Our overall hedge fund sentiment score for BKNG is 86.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately BKNG wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BKNG were disappointed as the stock returned -11.5% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.