Artisan Partners, an investment management firm, published its “Artisan Global Value Fund” second-quarter 2022 investor letter – a copy of which can be downloaded here. A return of -13.40% was recorded by its Investor Class: ARTGX, -13.32% by its Advisor Class: APDGX, and -13.33% by its Institutional Class: APHGX, in the second quarter of 2022, outperforming its MSCI All Country World benchmark that delivered a -15.66% return in the same period. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Artisan Global Value Fund mentioned Expedia Group Inc. (NASDAQ:EXPE) and explained its insights for the company. Founded in 1996, Expedia Group Inc. (NASDAQ:EXPE) is a Seattle, Washington-based online travel shopping company with a $16.5 billion market capitalization. Expedia Group Inc. (NASDAQ:EXPE) delivered a -41.73% return since the beginning of the year, while its 12-month returns are down by -35.68%. The stock closed at $105.31 per share on July 28, 2022.
Here is what Artisan Global Value Fund has to say about Expedia Group Inc. (NASDAQ:EXPE) in its Q2 2022 investor letter:
“Expedia declined 52% during the quarter due to concerns a consumer recession will reduce spending on discretionary items like travel, as well as concerns that the company is losing market share to other online travel agencies. While the fears of a potential recession are real, the current environment is actually pretty good. This summer will be one of the busiest travel seasons. As recently as June, Expedia’s management signaled it had yet to see any signs of a slowdown. It could certainly happen, but it has not yet.
Recent results, while strong, did show a slower recovery compared to peers. Part of the shortfall in performance is explained by mix. The other part is due to the company’s decision to restructure its business during the pandemic. Over the past two years, Expedia made significant changes to improve structural profitability by cutting off unprofitable partners, geographies and marketing channels. The business is somewhat smaller but should be stronger and far more profitable than it was prior to the pandemic.
Benefits from Expedia’s improvements are already visible and should continue into next year as they are fully implemented. The improvements should help the company shift to a less transactional business model that creates more durable relationships with customers and drives good profit growth into 2023. The company announced unit economics had already improved and plans to provide new disclosures allowing investors to track the performance of its improvements.
Expedia’s shares are now trading around the same level as during the middle of the pandemic. It is hard to imagine any recessionary scenario that could equal the middle of COVID-19 when travel was
essentially non-existent. Looking through this, we estimate normal earnings power in the $11-$12 per share range, which puts the shares at 7X-8X normal earnings.”
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Our calculations show that Expedia Group Inc. (NASDAQ:EXPE) ranks 29th on our list of the 30 Most Popular Stocks Among Hedge Funds. Expedia Group Inc. (NASDAQ:EXPE) was in 88 hedge fund portfolios at the end of the second quarter of 2022, compared to 82 funds in the previous quarter. Expedia Group Inc. (NASDAQ:EXPE) delivered a -42.58% return in the past 3 months.
In May 2022, we also shared another hedge fund’s views on Expedia Group Inc. (NASDAQ:EXPE) 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.
