Should You Still Consider Investing in TripAdvisor (TRIP)?

Baron Funds, an asset management firm, published its “Baron Opportunity Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. A decline of 2.03% was delivered by the fund’s institutional shares for the third quarter of 2021. For the period, the Fund trailed the Russell 3000 Growth Index, which rose 0.69%, and the S&P 500 Index, which increased 0.58%. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Baron Opportunity Fund, in its Q3 2021 investor letter, mentioned TripAdvisor, Inc. (NASDAQ: TRIP) and discussed its stance on the firm. TripAdvisor, Inc. is a Needham, Massachusetts-based online travel company with a $3.7 billion market capitalization. TRIP delivered a -5.52% return since the beginning of the year, while its 12-month returns are down by -7.49%. The stock closed at $27.19 per share on December 08, 2021.

Here is what Baron Opportunity Fund has to say about TripAdvisor, Inc.  in its Q3 2021 investor letter:

“On our investments in Tripadvisor, Inc., we identified issues relating to our long-term theses in each company and focused our research on these topics. Given these issues and because we continued to have a solid flow of new ideas, we reduced the stock to what we considered to be more appropriate position sizes. We decreased our weighting in Tripadvisor as we analyzed new developments in and changes to its Trip Plus subscription offering. Our research is ongoing, but our work so far has led us to remain convinced of Tripadvisor’s long-term opportunity with Trip Plus, which we believe is an important second act and TAM expander for the company. Tripadvisor has massive reach and brand equity with 460 million unique visitors to its sites. However, the company has historically under-monetized that traffic, with most of its revenue coming from hotel advertising, not directly from its end users. The Trip Plus subscription addresses this opportunity and is a differentiated new avenue for growth. For $99 per year, subscribers get perks like upgrades and discounts on Tripadvisor bookings. Management is passing on its commission from hotel bookings as savings to the end-consumer. We believe this is a compelling value proposition, which should drive customer loyalty and unlock a significant new revenue driver for the company.”

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Based on our calculations, TripAdvisor, Inc. (NASDAQ: TRIP) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. TRIP was in 33 hedge fund portfolios at the end of the third quarter of 2021, compared to 36 funds in the previous quarter. TripAdvisor, Inc. (NASDAQ: TRIP) delivered a -20.80% return in the past 3 months.

Disclosure: None. This article is originally published at Insider Monkey.