Hedge Funds Are Dumping Booking Holdings Inc. (BKNG)

With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was Booking Holdings Inc. (NASDAQ:BKNG).

Is Booking Holdings Inc. (NASDAQ:BKNG) worth your attention right now? The smart money was getting less optimistic. The number of bullish hedge fund positions were trimmed by 3 recently. Booking Holdings Inc. (NASDAQ:BKNG) was in 100 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 113. Our calculations also showed that BKNG ranked 20th among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 103 hedge funds in our database with BKNG holdings at the end of March.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Daniel Sundheim D1 Capital

Daniel Sundheim of D1 Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s review the fresh hedge fund action regarding Booking Holdings Inc. (NASDAQ:BKNG).

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

At Q2’s end, a total of 100 of the hedge funds tracked by Insider Monkey were long this stock, a change of -3% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in BKNG over the last 24 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Booking Holdings Inc. (NASDAQ:BKNG) was held by Citadel Investment Group, which reported holding $736.5 million worth of stock at the end of June. It was followed by GuardCap Asset Management with a $619.8 million position. Other investors bullish on the company included Alkeon Capital Management, D1 Capital Partners, and Ako Capital. In terms of the portfolio weights assigned to each position Jeneq Management allocated the biggest weight to Booking Holdings Inc. (NASDAQ:BKNG), around 9.9% of its 13F portfolio. GuardCap Asset Management is also relatively very bullish on the stock, dishing out 8.95 percent of its 13F equity portfolio to BKNG.

Since Booking Holdings Inc. (NASDAQ:BKNG) has faced a decline in interest from the entirety of the hedge funds we track, logic holds that there was a specific group of hedgies that elected to cut their positions entirely last quarter. Interestingly, Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management dropped the biggest investment of the 750 funds tracked by Insider Monkey, valued at about $201.1 million in stock. Daniel S. Och’s fund, OZ Management, also sold off its stock, about $201.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 3 funds last quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Booking Holdings Inc. (NASDAQ:BKNG) but similarly valued. We will take a look at PetroChina Company Limited (NYSE:PTR), BP plc (NYSE:BP), Zoetis Inc (NYSE:ZTS), Prologis Inc (NYSE:PLD), Altria Group Inc (NYSE:MO), Fidelity National Information Services Inc. (NYSE:FIS), and Mondelez International Inc (NASDAQ:MDLZ). This group of stocks’ market values resemble BKNG’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PTR 8 85856 0
BP 30 1080625 1
ZTS 58 2705785 0
PLD 40 563748 1
MO 47 948996 9
FIS 72 7369909 -2
MDLZ 53 2946868 8
Average 44 2243112 2.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 44 hedge funds with bullish positions and the average amount invested in these stocks was $2243 million. That figure was $6944 million in BKNG’s case. Fidelity National Information Services Inc. (NYSE:FIS) is the most popular stock in this table. On the other hand PetroChina Company Limited (NYSE:PTR) is the least popular one with only 8 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 87. 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 returned 24.1% in 2021 through September 20th but still managed to beat the market by 6.9 percentage points. Hedge funds were also right about betting on BKNG as the stock returned 7% since the end of June (through 9/20) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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