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Booking Jumped after Goldman Said Stock Is Likely to Outperform


Jun. 5 2019, Updated 7:42 a.m. ET

Booking stock gained

Booking Holdings (BKNG) stock jumped ~6% on June 4 after Goldman Sachs (GS) put it on a list of 12 stocks that are likely to outperform the broader market in spite of the ongoing trade disputes.

In its latest research report, the investment bank released a list of 12 crowded stocks that are the most popular and heavily held by mutual funds and hedge funds. Goldman Sachs believes these stocks are most likely to outperform the rest of the market despite the escalating US trade wars with China and Mexico.

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Goldman Sachs in its June 3 US Weekly Kickstart Report said, “The underperformance of popular positions today following President Trump’s announcement of tariffs on imports from Mexico underscores investor concern about crowded positions,” Investopedia reported. However, the report further stated, “Despite posing a tactical risk, concentrated ownership has generally been a positive signal for subsequent stock returns.”

Booking Holdings has managed to make a place on the list even though the stock had lost 4.2% of its value since the beginning of the year until June 3. However, yesterday’s gain in its stock price resulted in a YTD gain of 1.4%.

Booking Holdings’ YTD gain has underperformed the returns of major US indexes. The Dow Jones, the NASDAQ, and the S&P 500 indexes are up 8.6%, 13.4%, and 11.8%, respectively. The stock has also underperformed the Consumer Discretionary Select Sector SPDR Fund (XLY), which invests in S&P 500 consumer discretionary stocks. The ETF has gained 14.1% YTD.

Booking Holdings stock’s lackluster performance was mainly due to concerns about its growth prospect after the company in February provided a dismal outlook for 2019. The company revealed massive investments in the current year, which would weigh on its bottom-line results.

Other stocks on the list

Goldman Sachs’ list also includes stocks like Adobe (ADBE), Citigroup (C), Salesforce (CRM), and Alphabet (GOOGL). These stocks have gained 18.8%, 26.5%, 10.1%, and 1%, respectively, YTD.


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