Was The Smart Money Right About Booking Holdings Inc. (BKNG)?

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 at Insider Monkey have plowed through 873 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article we look at what those investors think of Booking Holdings Inc. (NASDAQ:BKNG).

Is Booking Holdings Inc. (NASDAQ:BKNG) a cheap investment right now? Money managers were getting less optimistic. The number of long hedge fund positions decreased by 3 lately. Booking Holdings Inc. (NASDAQ:BKNG) was in 100 hedge funds’ portfolios at the end of June. 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 positions at the end of the first quarter.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Daniel Sundheim D1 Capital

Daniel Sundheim of D1 Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. Recently we came across a high growth stock that has tons of hidden assets and is trading at an extremely cheap valuation. We go through lists like the 10 best growth stocks to buy 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. Now we’re going to check out the key hedge fund action encompassing Booking Holdings Inc. (NASDAQ:BKNG).

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

At the end of the second quarter, a total of 100 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the first quarter of 2020. On the other hand, there were a total of 96 hedge funds with a bullish position in BKNG a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

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.

Due to the fact that Booking Holdings Inc. (NASDAQ:BKNG) has witnessed a decline in interest from the aggregate hedge fund industry, we can see that there exists a select few funds that decided to sell off their positions entirely in the second quarter. At the top of the heap, Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management cut the biggest stake of the “upper crust” of funds tracked by Insider Monkey, comprising close to $201.1 million in stock, and Daniel S. Och’s OZ Management was right behind this move, as the fund said goodbye to about $201.1 million worth. These transactions are important to note, as total hedge fund interest dropped by 3 funds in the second quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Booking Holdings Inc. (NASDAQ:BKNG) but similarly valued. These stocks are 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 are closest to 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 26.3% in 2021 through October 29th but still managed to beat the market by 2.3 percentage points. Hedge funds were also right about betting on BKNG as the stock returned 10.6% since the end of June (through 10/29) 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.