First Eagle Investment Management, an investment management firm, published its second-quarter 2021 investor letter – a copy of which can be downloaded here. A net return of 4.73% was delivered by the fund for the first half of 2021. The Fund underperformed the MSCI World Index which returned 13.05% for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of First Eagle Investment Management, the fund mentioned Booking Holdings Inc. (NASDAQ: BKNG) and discussed its stance on the firm. Booking Holdings Inc. is a Norwalk, Connecticut-based travel company with a $96.7 billion market capitalization. BKNG delivered a 5.62% return since the beginning of the year, while its 12-month returns are up by 31.62%. The stock closed at $2,375.97 per share on September 15, 2021.
Here is what First Eagle Investment Management has to say about Booking Holdings Inc. in its Q2 2021 investor letter:
“The leading detractors in the quarter (includes) Booking Holdings Inc. The owner of online reservation sites including booking.com, priceline.com and agoda.com, Booking Holdings generates the majority of its earnings in Europe. While the stock tailed off from its April highs, it appears well positioned for a potential rebound as global travel volumes pick up.”
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Based on our calculations, Booking Holdings Inc. (NASDAQ: BKNG) ranks 20th in our list of the 30 Most Popular Stocks Among Hedge Funds. BKNG was in 100 hedge fund portfolios at the end of the first half of 2021, compared to 103 funds in the previous quarter. Booking Holdings Inc. (NASDAQ: BKNG) delivered a 2.21% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Disclosure: None. This article is originally published at Insider Monkey.
