Is it a Good Choice to Invest in Booking Holdings (BKNG)?

Fiduciary Management, an investment management firm, published its “All-Cap Equity” second quarter 2022 investor letter – a copy of which can be downloaded here. The FMI All Cap strategy declined approximately 11.0% (gross)/11.1% (net) in the second calendar quarter compared to minus 16.92% for the iShares Russell 3000 ETF. Relative to the Russell 3000, sectors that detracted included Health Technology, Energy Minerals, and Utilities.  Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Fiduciary Management All Cap Portfolio mentioned Booking Holdings Inc. (NASDAQ:BKNG) and explained its insights for the company. Founded in 1996, Booking Holdings Inc. (NASDAQ:BKNG) is a Norwalk, Connecticut-based travel technology company with a $65.2 billion market capitalization. Booking Holdings Inc. (NASDAQ:BKNG) delivered a -31.51% return since the beginning of the year, while its 12-month returns are down by -33.09%. The stock closed at $1,643.21 per share on September 30, 2022.

Here is what Fiduciary Management All Cap Portfolio has to say about Booking Holdings Inc. (NASDAQ:BKNG) in its Q2 2022 investor letter:

"Several of our stocks have been hit even though the earnings have been solid, the outlook seems fine, and there is nothing to suggest the long-term is compromised. Booking Holdings Inc. is a poster children for this phenomenon. While we expect some earnings erosion from a recession or slowdown, Booking Holdings Inc. trade at 13.6 times FY2 earnings. Typically, these companies trade at multiples that are 50% higher. Our best guess for “the market” is that we will indeed see earnings estimates come down as the next few quarters unfold. The stock moves suggest something darker than we anticipate and regardless of the nearterm outlook, we believe the franchise values are significantly higher than the stocks would suggest. It looks like an excellent opportunity for investors with a long-term horizon."

Photo by sabina fratila on Unsplash

Our calculations show that Booking Holdings Inc. (NASDAQ:BKNG) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Booking Holdings Inc. (NASDAQ:BKNG) was in 93 hedge fund portfolios at the end of the second quarter of 2022, compared to 99 funds in the previous quarter. Booking Holdings Inc. (NASDAQ:BKNG) delivered a -7.06% return in the past 3 months.

In September 2022, we also shared another hedge fund’s views on Booking Holdings Inc. (NASDAQ:BKNG) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

Disclosure: None. This article is originally published at Insider Monkey.