Melvin Capital’s Top 5 Stock Holdings

4. Booking Holdings Inc. (NASDAQ: BKNG)

Booking Holdings Inc. (NASDAQ: BKNG) underperformed in the last twelve months due to pandemic related challenges. It is the fourth largest stock holding of Melvin Capital’s 13F portfolio, accounting for 4.36% of the overall portfolio. Despite the underperformance, Gabriel Plotkin increased its existing position by 14% during the September quarter.

MPE Capital, which has generated a 23.5% return for 2020, highlighted few stocks including Booking Holdings in an investor’s letter. Here is what MPE Capital stated:

“I also made some sizeable additions to previous holdings as the market offered us deep discounts to my estimates of fair value. One notable example being Booking Holdings. During the depths of the market panic of March, the market price reflected a half-off deal (very conservatively valued) for a well-capitalized leading accommodation travel platform run by a talented CEO. Booking Holdings had and continues to have plenty of cash on their balance sheet, a highly variable cost structure where they can shut-off advertising spend to save tons of cash (advertising was 33% of revenues in 2019), and a leading accommodations platform with deep network effects predominantly amongst independent hotel operators in Europe. There are risks that business travel may never recover to pre-covid peaks, but I don’t think leisure travel will follow that same lead.”