RCL Shares

Didn't pull the trigger last week and it looks like the sub $25 threshold has happened. Now, I am thinking that $15 is realistic even with the government aid.
If you need your money back in a few months, there is no safe price. You might as well buy a ticket on the Titanic.

If you believe in a demand turnaround next year onwards - a strong possibility - buy at a price you can afford. In the long run, waiting for that perfect timing has led many to miss the boat entirely - no pun.
 
If you need your money back in a few months, there is no safe price. You might as well buy a ticket on the Titanic.

If you believe in a demand turnaround next year onwards - a strong possibility - buy at a price you can afford. In the long run, waiting for that perfect timing has led many to miss the boat entirely - no pun.

I have no urgent timetable for any of my equity investments. Therefore, I decided to purchase into the tourism/travel industry this week. My investment horizon is long and I usually have a set % of return before selling.
 
Wow their stock keeps getting hammered. I thought last week it was a good buy in the $30 range, but now it's dipped below $25. I am definitely going to be buying soon because I think they will eventually recover, and in the meantime I get $50 of onboard credit for every 100 shares I own. Sounds like a win to me even if I don't time the market right.
 
I have been watching it but haven't had a chance to dig into their financials. Any one look at how much they owe vs cash on hand? Or any comparisons with other cruise lines?

My biggest concern is that the cruise line in the worst financial shape may be allowed to fail (a la 2009) and I don't want to be holding shares of that cruise line.
 


Yes and it's not good. They owe way more then they have cash on hand so I can see why people are selling it like crazy. They either need to start selling their assets or wait for a government hand out. I'm assuming the government will come in and save them at some point, just like they would have to do the same for the airlines.
 
Yes and it's not good. They owe way more then they have cash on hand so I can see why people are selling it like crazy. They either need to start selling their assets or wait for a government hand out. I'm assuming the government will come in and save them at some point, just like they would have to do the same for the airlines.
Most of their debt is long-term.

The existing liquidity situation isn't pretty, but it looks like the analysts cheered Carnival's earnings report today. They were expecting much worse. Of course, full effects won't be seen until the next quarter is out.
 
They still have quite a bit of short term debt that still far exceeds their cash on hand. They won't go bankrupt or anything because they have plenty of assets, but they will continue to bleed money until this coronavirus thing blows over.
 


Looks like they've secured $2.2B in credit. Stock got a boost even with the bloodshed today. I think we'll see a dividend cut/reduction shortly.
 
Yes, they do have a lot more untapped liquidity. Cash at hand is just what they have drawn on it so far.

The $2.2bn loan has a one-year term but can be renewed for one additional year. Cost is LIBOR plus ~2.5%, which translates to 3.5% to 4.0% total interest cost with fees at the moment. LIBOR will likely go down from here, and so will the total interest cost.

Hard to believe, but the big 30%-40% spikes today in RCL and NCLH have put this investment in black for me.
 
I win some and lose some. In RCL's case, I pulled the trigger last week and cashed out yesterday when my ROI >70%. I will watch for an announcement for dividend cuts/reduction in the coming weeks and then repeat the process.
 
While the cruises may all be on hold, it looks like their share prices have sailed!

This was a rare window. Bought enough shares in all three - first, for price gains roughly equivalent to a free cruise in each (lol) - and now from here, the shareholder benefit. No idea when I'll be able to use them though (and probably won't in the case of Carnival anyways).

I think this is a classic example of investing in what you know best.
 
Share prices have now found a range which is slightly trending upwards. There is major uncentainty on both sides though.

Why prices may go up?
- Rapid testing is implemented at the US ports, and you start some cruising in a bubble like that in Italy.
- A vaccine candidate reports more results, and you have an emergency approval in late 2020/early 2021.
- RCL and NCL also launch their own limited cruises in Europe or elsewhere to join Carnival and MSC in newsmaking.
- The conversation between the CDC and the cruise lines advance to the next stage.

Why prices may go down?
- US elections in 50 days = general market volatility
- US elections in 50 days = CDC is in no mood to talk and extends the ban
- Flu season/universities/schools bring back a 2.5th US virus wave, and the cases spike up again
- Recent spikes in Europe turn into a full-fledged second wave, shutting down the recently restarted cruises

I think we may have one more pullback in the fall before the vaccine results and testing take over the news. That may be the last opportunity to pick up some shares.

RCL, in particular, has already retraced more than 50% of its fall from the peak. NCLH and CCL just a third or even ess. Not that any of them is going back to those peaks anytime soon.
 
I'm not too worried about it. I bought 100 shares of RCL just so that way I can have $50 cruise credits every time I cruise with them. Someday it'll go back to it's all time highs and then I'll cash out, but while I wait for that to happen I'll collect some covered call premiums bi-weekly and the dividends that they pay out.
 
I bought another wave of shares a few months ago and cashed out last week. I am not sure if there will be another pullback to the sub $50 level, but I don't care as I've already accomplished my short-term investment goals with RCL.
 
Looks like a bit of a pullback is afoot with the new wave of cancellations and the spikes in the virus cases in Europe.

We are looking to build a position for shareholder benefits for a second room.

RCL's benefits are the stingiest - and CCL's most generous - relative to what you have to shell out for each.
 
Barclays thinks that CDC might lift the NSO next week.

https://www.cnbc.com/2020/09/25/-barclays-says-its-time-to-buy-the-cruise-stocks.html
We built a second position in two of the stocks this week.

Nonetheless, I doubt the CDC can do much in the short time frame before Sep 30. The fall flu season, a second European wave, and the November elections are still ahead of us. An early vaccine approval remains the catalyst for a major rally.
 
The NSO expires again in about a week, and the election results will start trickling in just a few days later. Expect a lot more volatility in the next two weeks, and be prepared to pull the trigger if you like a price!
 
I think we may have one more pullback in the fall before the vaccine results and testing take over the news. That may be the last opportunity to pick up some shares.

RCL, in particular, has already retraced more than 50% of its fall from the peak. NCLH and CCL just a third or even ess. Not that any of them is going back to those peaks anytime soon.
We took advantage of the selling pressure in the last month to complete building out the second position in all three.

And the chickens have come home. A monster move today - particularly in CCL!
 
Last edited:

GET A DISNEY VACATION QUOTE

Dreams Unlimited Travel is committed to providing you with the very best vacation planning experience possible. Our Vacation Planners are experts and will share their honest advice to help you have a magical vacation.

Let us help you with your next Disney Vacation!






Top