1. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 99
Booking Holdings Inc. (NASDAQ:BKNG) is a Connecticut-based leading traveling aggregator with a presence in over 220 countries through six brands.
During the second quarter of the year, Booking Holdings Inc. (NASDAQ:BKNG) reported a record revenue of $4.30 billion, reflecting an increase of 99% from Q2 2021. Meanwhile, adjusted EPS was posted at $19.08 and surpassed analysts’ forecast of $17.67.
On August 4, Jed Kelly at Oppenheimer gave an Outperform rating on Booking Holdings Inc. (NASDAQ:BKNG) with a price target of $2480. The analyst thinks that the travel aggregator is likely to gain more website traffic as consumers look for cheaper deals in periods of rising inflation.
Following the quarterly results, Stephen Ju at Credit Suisse highlighted that since the start of the pandemic, Q2 2022 was the first quarter in which Booking Holdings Inc. (NASDAQ:BKNG) reported complete growth over the same period in 2019. Booking Holdings Inc.’s (NASDAQ:BKNG) CEO commented that he also anticipates a strong Q3 and Q4 for the company, with efforts being directed to increase the market share.
Here’s what LRT Capital Management said about Booking Holdings Inc. (NASDAQ:BKNG) in its Q2 2022 investor letter:
“Booking Holdings was formerly Priceline.com but has changed its name to reflect that source of most of its revenue: Booking.com. Booking.com is the largest online travel agency (OTA) in the world, connecting travelers and hotels. The company has over 2.3 million properties in 220 countries on its site, along with photos, reviews and details about the amenities offered by each property. The accommodations offered range from hotels, motels, homes & apartments, hostels, and bed & breakfasts. The company occupies a dominant position in the travel booking funnel and collects revenue from hotel reservations booked through its site. Booking.com is particularly strong in Europe, where chain hotels are less dominant and smaller independent hotel rely on it to fill their rooms.
In addition to Booking.com, the company owns agoda.com, priceline.com, rentalcars.com, OpenTable and the KAYAK flight search engine. Hotel bookings account for most of the revenue, but the company also offers car rental reservations, flights, vacation packages, cruises, tours, airport taxis, etc.
The company benefits from economies of scale in its investments in technology, national advertising, and customer loyalty programs. The business also has enormous network effects, as consumers are most likely to use a booking platform with the most properties, broadest availability of reviews and strong customer service. This in turn drives hotels to make their room inventory available on booking.com, which drives most of the reservation traffic for many boutique hotels, thus reinforces the network effect. Of note, is that Booking.com operates two models: the agency model, where the company simply acts as an agent for a hotel and collects a fee, and the merchant model, under which Booking.com buys the room-night from the hotel, but then retains the ability to optimize the pricing on the room.
Also of note is the fact that the acquisition of Booking.com by Priceline.com is amongst the most successful and value creating M&A transactions of all time.”
Yacktman Asset Management was the leading hedge fund investor in Booking Holdings Inc. (NASDAQ:BKNG) during Q2 2022.
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