Surprising Travel Stock a Historical Outperformer in February

The security could also benefit from an unwind of pessimism among options traders

Deputy Editor
Feb 3, 2022 at 1:45 PM
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With the exception of January's pullback, which was captured by the 320-day moving average late in the month, it's been pretty smooth sailing for Booking Holdings Inc (NASDAQ:BKNG). The stock sports a 21.1% year-over-year lead, and just broke back atop its year-to-date breakeven. On the other hand, BKNG has been battling a stiff ceiling at the $2,500 level since pulling back from its record high of $2,687.29 in mid-November. This could all change by the end of the month though, if history is any indicator. 

bkng feb 3

To be more specific, BKNG just landed on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks on the S&P 500 that averaged the highest February returns over the past 10 years. Of the 25 names on the list, Booking Holdings stock saw the best one-month return during this 10-year span, averaging a 9.9% one-month pop, with eight of these months positive. A move from its current perch at $2,439 would put the equity at $2,681 and back within striking distance of its record peak. 

best of february

An unwinding of pessimism among options traders could put more wind at the equity's back. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), three puts have been picked up for every call during the past two weeks. This ratio stands higher than all other readings from the past 12 months, implying a much bigger-than-usual appetite for long puts of late. 

What's more, short-term options traders have rarely been more put-biased. This is per BKNG's Schaeffer's put/call open interest ratio of 1.31, which stands higher than 75% of readings in its annual range. 

A round of upgrades could be on the way, especially with the reservations concern reporting earnings at the end of the month. While 12 analysts consider the stock a "buy" or better, six still say "hold." 

 




 
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