MPE Capital, an investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 23.5% was recorded by the fund for the whole of 2020, above its S&P 500 benchmark that returned 18.4%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.
MPE Capital, in their Q4 2020 Investor Letter said that they were able to notice that Booking Holdings Inc. (NASDAQ: BKNG), was in a discounted price to their estimates of fair value, that is why they acquired a position in the company. Booking Holdings Inc. is an online travel company that currently has a $84.6 billion market cap. For the past 3 months, BKNG delivered a 13.31% return and settled at $2,066.24 per share at the closing of January 22nd.
Here is what MPE Capital has to say about Booking Holdings Inc. in their Investor Letter:
"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."
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Last November 2020, we published an article telling that Booking Holdings Inc. (NASDAQ: BKNG) was in 98 hedge fund portfolios, its all time high statistics. BKNG delivered a 5.26% return in the past 12 months.
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