Intro
Time flies, my friend. The first three months of the year 2026 are in the past, and one quarter of the year is already over. Spring is knocking on the door increasingly loud and the birds are singing their beautiful songs.
It is time to check out the best buys for April!
We are looking at high uncertainty today, with the Iran war having the potential to escalate at any time. Therefore, the title picture. It just had to be an oil tanker. Uncertain times mean large fluctuations in stock prices, and this is exactly the time we, as long-term investors, are waiting for.
The large indices are slightly down this year so far, with -4% for the S&P500 and -6% for the NASDAQ100. The pendulum has swung a long way for some of the largest stocks. Microsoft is down 23% YTD, and Tesla did not fare much better with -21%. The Heatmap is mostly red, with some exceptions in the energy sector (hello high oil prices) and semiconductors.
A map like the one above invites you and me to search for the bargains among those that have been sold down (too far).
Invest at your own risk; this is not financial advice! This is not a recommendation to buy or sell any securities discussed in the article.
SaaS stocks are still being treated as dead men walking, and I still believe that the sell-off has gone too far for some of them. The following two articles still hold today and are a must-read IMHO if you want to understand a) AI better and b) learn about the impact of AI on (software) companies.
As you might have guessed, the threat of AI replacing everything and everyone is the big thing that keeps investors up at night. To understand the current state of AI, make sure to read this article:
Now that you are familiar with AI and what is happening in software stocks, let’s get right into it:
If you want to go beyond reading and actually invest alongside me, you can invest in my Wikifolio. Every position reflects the same research-driven, long-term investing approach behind these deep dives — including investments such as Arista Networks, Alphabet, ASML, AMD, and now Booking. You will find it here:
Best Buys today
I will just link to my deep dives for Adobe (-31% YTD) and Salesforce (-29% YTD) and will not reiterate my thesis, since I did so in the last Best Buys article from February. The only thing that changed: Both stocks got even cheaper.
You will find the Best Buys article for February here:
With that being said, let’s move to the first pick, which gives you a two-for-one chance.
Mastercard & Visa
To summarize my thesis on Mastercard (and Visa, for that matter). Mastercard is one of the very best companies out there. Not that many companies have the luxury of operating in a Doupol. Mastercard and Visa dominate the financial transaction service market, and both have been some of the very best investments you could have made for many decades. Having a toll both on digital transactions in the world is, to no surprise, a fantastic business model.
The net income development of both Visa and Mastercard has been flat-out fantastic.
Mastercard is the better company of the two, and the long-term stock price development has shown that as well.
You will learn more about Mastercard and the business behind this fantastic stock here. Make sure to read the article.
Since I published the article, the shares have come down a bit more. Mastercard is not cheap by any traditional metric, but it is rare to buy such a fantastic company at a very low price. Instead, we must be happy when we can buy such a company at a discount to its historical valuation, and today is one of these times. The FYe EV/net income is at 26, and the EV/(FCF-SBC) is at 27.
For those interested in Visa: Visa is also at a sitting at a very attractive price level.
EPS for Mastercard is expected to keep rising at the 15% p.a. level. Therefore, I argue taht todays price is a great time to add to Mastercard.
As you can see, large dips are mostly unknown to both companies. Even the COVID dip disappeared before most people realized that Mastercard and Visa were finally cheap(er).
Booking
I am sure that you will know Booking. If you are a frequent traveler, you are likely to use Booking or Expedia and one of its brands regularly.
Expedia was fantastically cheap in 2023, and I am very happy with the returns:
In general, however, Booking is the better company of the two.
Bookings revenue keeps rising at double digits (ignore the obvious Covid bump). If hotels get more expensive, so does the absolute dollar amount that Booking takes.
Free Cash Flow and net income have developed fantastically as well. Free Cash Flow is higher in most years due to a couple of factors:
Amortization of acquired intangibles (the former takeovers) affects only the net income and not the Free Cash Flow
Customers pay upfront, and Booking only pays the hotel once the customer stays there. This leads to a negative working capital
There is almost no CapEx since Booking does not own any hotels
The SBC is an expense, but it is added back to the Free Cash Flow.
In 2025, the gap was exceptionally large, and there is one big reason for it: Booking issued EUR-dominated debt, which over the course of 2025 increased when converted to USD, since the USD weakened. This is an unrealized loss, since nothing in the EUR debt changed. Therefore the large deviation from net income to Free Cash Flow.
A short side note. Ewout Steenbergen, CFO of Booking, made the following statement in the most recent earnings call. He is spot on!
A nice bonus for any investor in Booking: Your share of the company keeps increasing while you sleep. Booking bought back more than 1/3 of the company in the last 10 years. This also drives the EPS since the earnings are divided by fewer shares. Expect this trend to continue since there was a $21.8 billion share authorization open as of the 31st December 2025. TO put this into perspective: That is 16% of the current market capitalization.
So what about AI? I believe the network effect of Booking is strong. There is an innumerable number of little hotels that are part of the Booking network. Good luck getting them all into a ChatGPT, Claude, or whatever other API there might be. At the same time, Booking is a trusted brand. This drives continuous usage, and these human biases are here to stay.
AI can even be of benefit to Booking. This can be achieved through better customer support, faster and cheaper development of the platform, more individualized search options, and booking experience.
Bookings management talked about the benefits in the Q4 earnings call:
In 2025, we focused on rolling out agentic capabilities across our brands that enhance the full traveler journey — helping customers discover and plan trips through natural-language search, make more informed booking decisions with smart filters and summaries, and get better, faster support before and during their trip through interactive AI agents. Once established in our core accommodations business, we then extended these capabilities into other verticals and added voice functionality.
As general-purpose LLMs increasingly create new top-of-funnel entry points for travel and generative AI drives increased global online participation and spend, our proactive engagement with major technology and AI players is positioning us to meet whatever level of demand ultimately migrates from traditional search firms to horizontal LLMs. In everything we do, we leverage our global breadth, proprietary data, deep supplier integrations, decades of travel industry experience, and talented teams to accelerate the realization of AI’s value across our business and for our customers. Ultimately, our goal is to leverage AI to make it easier for everyone to experience the world, and we are encouraged by the progress we’re making and the opportunities ahead.
Let’s talk valuation: I am purposely starting in 2023, since the COVID years were crazy outliers for a travel company. Both the P/E and the forward P/E are at the lower range of the last 3 years.
The EV/FCF is similarly cheap with a value of 15.4. If we deduct SBC from the FCF, we arrive at an EV/(FCF-SBC) of 16.3.
On the 2nd of April, Booking finalized a 25:1 stock split to make the stock more attractive to retail investors. Before that, each share was north of $4000.
One more buy and one stock that I have sold
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