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 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31 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.
Booking Holdings Inc. (NASDAQ:BKNG) investors should be aware of a decrease in hedge fund interest recently. BKNG was in 77 hedge funds' portfolios at the end of the first quarter of 2019. There were 84 hedge funds in our database with BKNG holdings at the end of the previous quarter. Our calculations also showed that BKNG ranked 21st among the 30 most popular stocks among hedge funds.
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 flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to view the fresh hedge fund action regarding Booking Holdings Inc. (NASDAQ:BKNG).
What have hedge funds been doing with Booking Holdings Inc. (NASDAQ:BKNG)?
Heading into the second quarter of 2019, a total of 77 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards BKNG over the last 15 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Citadel Investment Group held the most valuable stake in Booking Holdings Inc. (NASDAQ:BKNG), which was worth $637.6 million at the end of the first quarter. On the second spot was Lone Pine Capital which amassed $560.8 million worth of shares. Moreover, Tiger Global Management, Yacktman Asset Management, and Farallon Capital were also bullish on Booking Holdings Inc. (NASDAQ:BKNG), allocating a large percentage of their portfolios to this stock.
Seeing as Booking Holdings Inc. (NASDAQ:BKNG) has witnessed bearish sentiment from the aggregate hedge fund industry, it's safe to say that there lies a certain "tier" of fund managers that elected to cut their positions entirely in the third quarter. Intriguingly, Eric W. Mandelblatt and Gaurav Kapadia's Soroban Capital Partners sold off the biggest investment of the "upper crust" of funds followed by Insider Monkey, totaling an estimated $218.5 million in stock. Alexander Captain's fund, Cat Rock Capital, also sold off its stock, about $54.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 7 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks similar to Booking Holdings Inc. (NASDAQ:BKNG). These stocks are Charter Communications, Inc. (NASDAQ:CHTR), Caterpillar Inc. (NYSE:CAT), Bristol Myers Squibb Company (NYSE:BMY), and U.S. Bancorp (NYSE:USB). This group of stocks' market valuations are similar to BKNG's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CHTR,67,7391525,3 CAT,53,3394463,-7 BMY,71,4098599,13 USB,44,6941152,3 Average,58.75,5456435,3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 58.75 hedge funds with bullish positions and the average amount invested in these stocks was $5456 million. That figure was $5668 million in BKNG's case. Bristol Myers Squibb Company (NYSE:BMY) is the most popular stock in this table. On the other hand U.S. Bancorp (NYSE:USB) is the least popular one with only 44 bullish hedge fund positions. Compared to these stocks Booking Holdings Inc. (NASDAQ:BKNG) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately BKNG wasn't as popular as these 20 stocks and hedge funds that were betting on BKNG were disappointed as the stock returned -4.1% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.