The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Booking Holdings Inc. (NASDAQ:BKNG) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is BKNG stock a buy or sell? Booking Holdings Inc. (NASDAQ:BKNG) investors should pay attention to a decrease in hedge fund sentiment lately. Booking Holdings Inc. (NASDAQ:BKNG) was in 108 hedge funds’ portfolios at the end of December. The all time high for this statistic is 113. Our calculations also showed that BKNG ranked 19th among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock 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 (or at the end of this article). With all of this in mind we’re going to take a peek at the new hedge fund action encompassing Booking Holdings Inc. (NASDAQ:BKNG).
Do Hedge Funds Think BKNG Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 108 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BKNG over the last 22 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
The largest stake in Booking Holdings Inc. (NASDAQ:BKNG) was held by Melvin Capital Management, which reported holding $783 million worth of stock at the end of December. It was followed by Ako Capital with a $611.1 million position. Other investors bullish on the company included D1 Capital Partners, GuardCap Asset Management, and Viking Global. In terms of the portfolio weights assigned to each position PAR Capital Management allocated the biggest weight to Booking Holdings Inc. (NASDAQ:BKNG), around 10.52% of its 13F portfolio. GuardCap Asset Management is also relatively very bullish on the stock, dishing out 9.73 percent of its 13F equity portfolio to BKNG.
Due to the fact that Booking Holdings Inc. (NASDAQ:BKNG) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of fund managers that slashed their entire stakes heading into Q1. At the top of the heap, John Armitage’s Egerton Capital Limited said goodbye to the biggest position of the “upper crust” of funds monitored by Insider Monkey, comprising an estimated $257.8 million in stock, and Sharlyn C. Heslam’s Stockbridge Partners was right behind this move, as the fund cut about $150.7 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 5 funds heading into Q1.
Let’s now take a look at 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 Goldman Sachs Group, Inc. (NYSE:GS), Uber Technologies, Inc. (NYSE:UBER), CVS Health Corporation (NYSE:CVS), Target Corporation (NYSE:TGT), Fidelity National Information Services Inc. (NYSE:FIS), Airbnb, Inc. (NASDAQ:ABNB), and British American Tobacco plc (NYSE:BTI). 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|
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As you can see these stocks had an average of 73 hedge funds with bullish positions and the average amount invested in these stocks was $4479 million. That figure was $8247 million in BKNG’s case. Uber Technologies, Inc. (NYSE:UBER) is the most popular stock in this table. On the other hand British American Tobacco plc (NYSE:BTI) is the least popular one with only 10 bullish hedge fund positions. Booking Holdings Inc. (NASDAQ:BKNG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BKNG is 79.9. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately BKNG wasn’t nearly as successful as these 30 stocks and hedge funds that were betting on BKNG were disappointed as the stock returned 2.7% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the more diversified list of the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.