We recently published a list of 9 Best Stocks to Buy in 2024 According to Billionaire George Soros. Since Booking Holdings Inc. (NASDAQ:BKNG) ranks 7th in the list, it deserves a deeper look.
Billionaire George Soros has been one of the most active and divisive figures in the Wall Street. Often a right-wing target, the billionaire handed over the control of his $25 billion empire to his son Alexander Soros last year. The 93 year-old Hungarian American is known as the philosopher investor in the Wall Street, mainly due to his contributions to philosophy and his deep desire to leave his mark in the world of philosophy, which many believe he fulfilled thanks to his General Theory of Reflexivity for capital markets.
George Soros founded Soros Fund Management in 1970. Since its inception through 2010, the fund posted on average a 20% annual rate of return. A Wall Street Journal report earlier this year said that Soros Fund Management has posted a compound annual return of 13.5% over the past three years through June 30, 2023.
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George Soros in his book The New Paradigm of Financial Markets wrote a chapter titled “Autobiography of a Failed Philosopher” in which he talked in detail about how many, including his son and his biographer, started accepting the idea that Soros was a failed philosopher. Soros talks in detail about his childhood, his relationship with his father who at one point, according to Soros, lost all ambition in life and did not amass any wealth. A Jew by birth, Soros decided to come to the UK after the Nazi occupation of Hungary. Soros’ first interactions with philosophy started when he was impressed by the works of Karl Popper. But Soros’ dreams of creating a career in philosophy could not realize for several reasons, some of which he talks about in his book:
“I would have preferred to stay within the safe walls of academe—I even had a teaching assistant job prospect at the University of Michigan in Kalamazoo, but my grades were not good enough, and I was forced to go out into the real world. After several false starts, I ended up working as an arbitrage trader, first in London and then in New York.* At first I had to forget everything I had learned as a student in order to hold down my job, but eventually my college education came in very useful. In particular, I could apply my theory of reflexivity to establish a disequilibrium scenario or boom-bust pattern for financial markets. The rewarding part came when markets entered what I called far-from-equilibrium territory because that is when the generally accepted equilibrium models broke down.”
For this article we scanned Billionaire Soros’s Soros Fund Management’s Q1 portfolio and chose its top 9 stock picks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Booking Holdings Inc. (NASDAQ:BKNG)
Billionaire George Soros’s Q1’2024 Stake Value: $64,975,331
Booking Holdings Inc. (NASDAQ:BKNG) is one of the leaders in the online travel industry, where online travel market worldwide had gross travel revenues (GTV) of $546 Billion as of the end of 2023 and the market is expected to grow at a CAGR of 12% per year through to FY2032. Analysts believe Booking Holdings Inc. (NASDAQ:BKNG) is positioned well to ride the wave of the massive rise in online travel demand as people prefer to spend on experiences instead of stuff. During the first quarter, Booking Holdings Inc.’s (NASDAQ:BKNG) revenue jumped 17% year over year to $4.4 billion, while adjusted EBITDA was 53% YoY. EPS in the period saw a 67% jump. Room nights booked, a key metric for Booking.com, jumped 9% in the quarter to 300 million.
Amid Booking Holdings Inc.’s (NASDAQ:BKNG) investments in AI, partnerships, advertising revenue and expansion, analysts expect continued earnings growth. According to data from Yahoo Finance, Booking Holdings Inc.’s (NASDAQ:BKNG) earnings are expected to grow 17.20% next year and at 22% for the following five years on a per-annum basis. Despite the growth, Booking Holdings Inc. (NASDAQ:BKNG) shares are trading at 28 times their earnings, compared to the industry median of 18. Based on its 2025 EPS estimate, the stock is trading at a forward P/E of 18, which makes the stock’s valuation attractive. Booking is one of the best stocks to buy in 2024 according to Soros’s fund.
Wedgewood Partners stated the following regarding Booking Holdings Inc. (NASDAQ:BKNG) in its first quarter 2024 investor letter:
“Booking Holdings Inc. (NASDAQ:BKNG) contributed negatively to relative performance. The Company grew bookings on their platforms +16% and reported +22% growth in adjusted operating income during their fourth quarter of 2023. We think the market is cautious about the Company’s results for 2024 because they will be lapping very high levels of growth compared to those in 2023 (full year 2023 bookings growth +24%). However, Booking’s end markets continue to be quite healthy, outside of geographies affected by war because consumers still have plenty of wallet share to re-dedicate to travel compared to pre-COVID-19 numbers. We applaud the Company as they aggressively repurchase shares at valuation levels well below the market and peers. This should serve to compound our ownership in Booking’s business, which has exceptional pro2itability.”
Overall, Booking Holdings Inc. (NASDAQ:BKNG) ranks 7th in Insider Monkey’s list of Billionaire George Soros’s 10 Best Stock Picks in 2024. You can visit 9 Best Stocks to Buy in 2024 According to Billionaire George Soros to see other stock picks of Billionaire George Soros. While we acknowledge the potential of Booking Holdings Inc. (NASDAQ:BKNG), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Booking Holdings Inc. (NASDAQ:BKNG) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.