L1 Capital International, an investment management company, released its “L1 Capital International Fund” third-quarter 2022 investor letter. A copy of the same can be downloaded here. The fund returned -0.4% net of fees in the third quarter compared to a 0.3% return for the MSCI World Net Total Return Index in AUD. The depreciation of Australian dollars against the USD and Euro added to the fund’s reported and benchmark returns. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
L1 Capital International highlighted stocks like Booking Holdings Inc. (NASDAQ:BKNG) in its Q3 2022 investor letter. Headquartered in Norwalk, Connecticut, Booking Holdings Inc. (NASDAQ:BKNG) is a global online travel company. On December 6, 2022, Booking Holdings Inc. (NASDAQ:BKNG) stock closed at $2,042.19 per share. One-month return of Booking Holdings Inc. (NASDAQ:BKNG) was 9.45% and its shares lost 11.49% of their value over the last 52 weeks. Booking Holdings Inc. (NASDAQ:BKNG) has a market capitalization of $80.329 billion.
L1 Capital International made the following comment about Booking Holdings Inc. (NASDAQ:BKNG) in its Q3 2022 investor letter:
“The investment thesis for Booking Holdings Inc. (NASDAQ:BKNG), the world’s largest online travel agent (OTA), was outlined in our inaugural June 2019 Quarterly Report and our current thoughts were outlined in the June 2022 Quarterly Report. Booking’s share price is the same as it was five years ago and the same as it was following the onslaught of COVID-19, but pre the FDA approval of vaccines.
We forecast Booking will make about as much net profit in 2022 as it did in 2017 (over $3b), so superficially you may conclude that it is reasonable for the share price to be at a similar level in 2022 as it was in 2017. However, this would miss 5 years of sustained operational investment, improved products and services, and a strengthened competitive position.
In addition, travel has not fully recovered from COVID-19 in 2022. Many markets remain disrupted, particularly outbound travel from China. While 2023 may be impacted by economic conditions, we believe Booking’s growth outlook over the medium to long term remains robust.
In addition, over the past 5 years, Booking has bought back around 20% of shares on issue while retaining the same small amount of net debt. This means the total enterprise value of Booking is around 20% lower than it was 5 years ago. The total enterprise value of Booking today is the same as it was near the depths of the COVID-19 crash, or back in 2015 when the earnings power of Booking was around half of what it is today. We consider the current share price offers compelling value. Management agrees, recently commenting that they expect to accelerate their buyback activity, intending to complete around $10b of repurchases over 2 years, importantly without increasing financial leverage.”
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Booking Holdings Inc. (NASDAQ:BKNG) is in 21st position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 92 hedge fund portfolios held Booking Holdings Inc. (NASDAQ:BKNG) at the end of the third quarter, which was 93 in the previous quarter.
We discussed Booking Holdings Inc. (NASDAQ:BKNG) in another article and discussed whether Peter Avellone’s Cartenna Capital was right about 10 stocks it bought in the third quarter 2021. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
