Andy NasrBooking Holdings Inc.BKNGBUYNov 29, 2017

AI agents are the real concern to a company like this. 200-day MA trendline starting to move lower, stock price is below that. Sees 16% growth. Long term, secular tailwinds from travel. Technicals make it hard to buy now. 

He prefers, and owns, EXPE.

(Chart looks like a double-black-diamond ski slope because of the stock split of 25:1.) 

New addition to Dividend Growers portfolio in March. Global, best in class. Sophisticated online AI booking and payment engine. Concerns that AI will disrupt its moat is a case of baby out with the bathwater. Shares have compounded at 29% since 2000.

Edge that lets them earn north of 50% ROIC is a very collaborate partnerships with traffic drivers like META, GOOG, etc. Strong share buyback program. Yield is 0.90%.

BKNG has declined due to concerns that AI will disrupt its business. This is certainly possible, but AI can also help it. It has strong brands, a strong balance sheet and it knows its business and customers (this may help it compete with new entrants). Strong earnings growth is still very much expected. They would not consider it a sell. Unlock Premium - Try 5i Free

He's owned this for over 20 years. It's asset-lite, AI-enhanced and own Open Table, Kayak, RentalCars.com, Agoda and others. Are growing rapidly, over 20%. Next year they will earn over $200/share. This year, the market was afraid of a weak consumer and travel stocks weakening, but that didn't happen. Experiential travel remains strong.

Is efficient and asset-lite. AI fits in perfectly in what they do to generate future earnings. They own several, large travel sites. Trades at 25x PE, reasonable. The poster child for compounding.

EPS of $55.40 beat estimates of $50.38; revenue of $6.79B beat estimates of $6.55B. EBITDA of $2.42B beat estimates by 10%. Booking's revenue view remains muted, with the US still the slowest-growing region despite some recovery in 2Q. Asia is now the fastest-growing market, and management predicts high-single-digit industry growth there over the medium term, making it central to the company's broader strategy. Gains in alternative accommodations outpaced the core hotels business, with listings reaching $8.4 million, up 8% year over year. Analysts expect 7.8% revenue growth for 3Q, in line with guidance of 7-9%, which is slightly below the company's gross-bookings view of 8-10% due to a higher mix of flight bookings and increased merchandise and contract revenue.  3Q adjusted Ebitda margin is 46.4%, as continued marketing expense leverage is offset by rising merchandising spending and sales costs. It is not the best outlook, but all things considered decent enough. The stock is still up 52% over the past year, and strong earnings growth is expected into 2026/27. The balance sheet also remains solid. It is 25X earnings. Note cheap, but in the lower part of its historical range. We would remain comfortable buying. 
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Fantastic, growing fast, yet trades at only 18-20x PE. Low-capital and innovative with smart managers. Diversified geographically. Booking.com is the cornerstone, built on European mom-and-pop hotels that grew successfully from there. He first bought this 30 years ago when this was Priceline.

BOOK decided to be an agent only, so they take a commission on every transaction. Operating margins of 30%. Investors like the capital-light model, giving it a higher multiple between high 20s or almost 30x PE. Today though, PE in low 20s.

EXPE buys hotel rooms in bulk and then resells them; takes more risk and more capital. Operating margins of 10%. PE usually around 20x. PE today is in low teens. Though not as good a business, valuation discount is excessive. Better risk/reward.

BKNG has been an amazing compounding machine. The stock is up +21,000% in the past 20 years. It has managed its growth well, made excellent acquisitions, managed recessions and kept its balance sheet strong. We have followed the company since shares were $20 (now $4,700). Good growth is still expected and its free cash flow is starting to really grow ($8B+ now). Even with massive growth it has reduced its share count by nearly 40% in the past decade. There are always risks, but this is one of our favorite growth stocks and is not even that expensive at 26X earnings. 
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The last quarter was good, with an 8% 'beat' on earnings. It is expected to show at least 15% earnings growth in 2025. It has a very strong balance sheet with no net debt. It is priced OK at 27X earnings. It is sensitive to the economy and interest rates, but we are comfortable with the outlook. We would be comfortable buying today.
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Has long owned this, the consummate growth company. They will like pass $200 EPS in 2025 vs. $10 EPS 15 years ago. Trades at only a 10% premium to the market.