FPA Crescent Fund recently released its Q1 2020 Investor Letter, a copy of which you can download here. The Fund posted a return of -20.51% for the quarter, underperforming its benchmark, the S&P 500 which returned -19.60% in the same quarter. You should check out FPA Crescent Fund’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.
In the said letter, FPA Crescent Fund highlighted a few stocks and Booking Holdings Inc. (NASDAQ:BKNG) is one of them. Booking Holdings offers online travel & related services. Year-to-date, Booking Holdings Inc. (NASDAQ:BKNG) stock lost 20.2% and on June 23rd it had a closing price of $1,677.10. Here is what FPA Crescent Fund said:
“In late March, we put a little over 2 percent of the portfolio into the travel space, specifically into well-financed companies that have a long enough runway to get through a temporary shutdown or even longer delay in travel-and-leisure spending. We purchased Booking Holdings, or “Booking,” at what we believe are low double-digit multiples of enterprise-value-to-trailing earnings. We did not take this position, however, simply because it was trading at a low multiple of our estimate of trailing or normalized earnings. Instead, Booking attracted us with, in our view, the long-term strength of its business and a strong balance sheet with net cash, further complemented by several billion dollars of investments in various securities. We also expect Booking to pare its expense structure, albeit with some lag, to protect profitability. We believe those attributes should more than sufficiently ensure that Booking emerges from the other side of this pandemic in a stronger position than its poorly financed peers. Regardless of what the new normal looks like, we are highly confident that Booking, with excellent stewards of its business and capital at the helm, will emerge as a profitable company generating excellent free cash flow.”
In Q1 2020, the number of bullish hedge fund positions on Booking Holdings Inc. (NASDAQ:BKNG) stock increased by about 22% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with Booking Holdings upside potential. Our calculations showed that Booking Holdings Inc. (NASDAQ:BKNG) is ranked #28 among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
Video: Top 5 Stocks Among Hedge Funds
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:
Disclosure: None. This article is originally published at Insider Monkey.
