Tag: LIND

Riding the Waves: Investing in Cruise Line Stocks for Growth

Investing in the stock market can be rewarding but challenging. Among the various sectors available, cruise line stocks have emerged as an intriguing option for many investors. With the world gradually recovering from the economic impacts of the pandemic, the cruise industry has been poised for a significant resurgence. Let’s dive into why cruise line stocks could be a smart addition to your investment portfolio.

Reasons to Invest in Cruise Line Stocks

1. Strong Rebound Potential

The cruise industry, like many others in the travel and tourism sector, was heavily impacted by the COVID-19 pandemic. However, as travel restrictions ease, the demand for cruising is expected to surge. Many cruise lines have reported a strong uptick in bookings for upcoming seasons. This rebound potential offers investors the opportunity to capitalize on the industry’s growth from its current undervalued state.

2. Diversified Revenue Streams

Cruise lines generate revenue from a variety of sources, including ticket sales, onboard spending, and excursions. This diversification helps mitigate risks associated with any single revenue stream. Cruise lines have been innovative in creating new revenue opportunities, such as premium dining experiences, exclusive shore excursions, and enhanced onboard entertainment options. This ability to diversify and innovate revenue streams positions cruise lines for sustained financial health and growth.

3. Strategic Cost Management and Expansion Plans

Many cruise lines have utilized the downtime during the pandemic to streamline operations and reduce costs. These cost-cutting measures, combined with strategic expansion plans, such as the introduction of new ships and itineraries, are set to enhance profitability as the industry recovers. Additionally, the industry’s focus on sustainability and adopting greener technologies could attract environmentally conscious investors, further boosting stock performance.

Listed below are the top four cruise line stocks:

  1. Norwegian Cruise Line Holdings Ltd. (NCLH) known for its premium brands—Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises—the company has built a loyal customer base that drives repeat business. Additionally, the company’s strategic initiatives, including cost management and the introduction of new, more efficient ships, are set to enhance profitability. These factors, combined with a focus on sustainability and innovation, make NCLH an attractive choice for investors looking to benefit from the anticipated resurgence in the travel and leisure sector.
  • Carnival Corporation & plc (CCL) Known as the world’s largest cruise company, with a diverse portfolio of brands including Carnival Cruise Line, Princess Cruises, and Holland America Line. The company’s extensive global reach and strong brand recognition position it well to capitalize on the rebound in travel demand as pandemic restrictions ease. CCL has implemented significant cost-saving measures and has invested in new, more efficient ships. Additionally, its focus on sustainability and innovative customer experiences, and strategic growth initiatives, make CCL a strong candidate for investors seeking to benefit from the recovery and growth of the cruise industry.
  • Royal Caribbean Group (RCL) is an attractive investment due to its status as a leading global cruise operator with renowned brands such as Royal Caribbean International, Celebrity Cruises, and Silversea Cruises. The company’s reputation for innovation, exemplified by its state-of-the-art ships and unique onboard experiences. RCL’s strategic initiatives, including cost efficiencies and fleet modernization with more sustainable and fuel-efficient vessels, positions itself with a strong financial outlook. 
  • Lindblad Expeditions Holdings, Inc. (LIND) has a niche focus on adventure and ecotourism, offering unique expedition experiences through its partnership with National Geographic. This strategic alignment allows LIND to cater to a growing market of environmentally conscious travelers seeking immersive and educational travel experiences. The company’s strong brand recognition and loyal customer base, combined with a fleet of specialized expedition ships, position it well to capitalize on the increasing demand for sustainable travel. 
CompanyCompany SymbolPrice to BookPEGPEPrice to SalesForward PEYield
Norwegian Cruise Line Holdings LtdNCLH20.490.5426.490.839.380.00%
Carnival Corp.CCL3.05NA62.530.911.050.00%
Royal Caribbean Cruises Ltd.RCL7.550.6619.812.6411.822.02%
Lindblad Expeditions Holdings IncLINDNANANA0.70NA0.00%

The cruise line industry presents a compelling investment opportunity due to its strong rebound potential, diversified revenue streams, and strategic cost management and expansion plans. As the world returns to normalcy, cruise line stocks are well-positioned to deliver significant returns to savvy investors.

Disclosure: Author has a short position in RCL.

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Top Travel Stocks Short Squeeze Plays

by Fred Fuld III

Many stocks in the travel industry have suffered during the last three years due to the COVID pandemic. Some have lost over 50% of their value since 2019. As the market prices for these stocks have dropped so much, now might be the time to look for short squeeze opportunities.

Here is a quick review about the short squeeze and its terminology. When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short selling can be profitable, but sometimes when the stock moves against the short sellers, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

Check out the following list, but be aware, that often some stocks are heavily shorted for a reason. All these stocks have significant short metrics, but they have very low market caps and floats.

Company Symbol Days to Cover % of Float Shorted
Carnival Corporation & plc CCL 2 10%
Expedia Group, Inc. EXPE 2.9 5%
Lindblad Expeditions Holdings, Inc. LIND 23.9 19%
Norwegian Cruise Line Holdings Ltd. NCLH 1.6 10%
Royal Caribbean Cruises Ltd. RCL 2.9 6%
TripAdvisor, Inc. TRIP 4 12%

So as an example, Carnival has 10% of the float shorted, and it will take two days for the short sellers to cover their positions, based on the average daily volume.

Obviously, there is no guarantee that these stocks will go up, but if I was short any stock, I wouldn’t want to waste any time covering my position if the stock started to move up sharply, before all the other short sellers clamor in and drive the price way up.

Disclosure: Author has a short and long option position in CCL.