CCL, NCLH, RCL UP

[rucrazy]

CCL and NCLH were both up over 8% today RCL up almost 7.5% as the industry seemed to like the CDC statement yesterday!

[CruiserBruce]

Or because the like the Senate passing the Act to temporary suspend the PVSA.

[rucrazy]

28 minutes ago, CruiserBruce said:

Or because the like the Senate passing the Act to temporary suspend the PVSA.

Either or Both... the industry is up today!

[FRANKIEDNYC]

Or maybe because they had been beaten down so much the first half of the week!

[KirkNC]

Or because there were more buyers then sellers today…..

 

A daily movement in stocks is beyond irrelevant.  The cruise lines stocks had been beat up for several days so they recovered a portion of that. A more meaningful analysis would ask how the lines are going to deal with the billions in debt they had to issue at very high rates and the massive dilution to existing shareholders as they issued hundred of millions of new shares.  The answer is not pretty. 

[CI66774]

2 hours ago, rucrazy said:

CCL and NCLH were both up over 8% today RCL up almost 7.5% as the industry seemed to like the CDC statement yesterday!

Overall market went up considerably today but they were battered earlier in the week.

[rkacruiser]

2 hours ago, rucrazy said:

CCL and NCLH were both up over 8% today RCL up almost 7.5% as the industry seemed to like the CDC statement yesterday!

 

I don't care about NCLH.  I don't like their balance sheet that I read.  Good news for CCL.  But, the "Fat Lady" has yet to sing the song that I am waiting to hear:  Happy Days Are Here Again.

[Mr. Boston]

Up today, down tomorrow.

[Gail & Marty sailing away]

3 minutes ago, Mr. Boston said:

Up today, down tomorrow.

You got it.

[CruiserBruce]

1 hour ago, Mr. Boston said:

Up today, down tomorrow.

Not on a Saturday...

[mcrcruiser]

On 5/14/2021 at 6:28 PM, CruiserBruce said:

Not on a Saturday...

LOL

[mcrcruiser]

On 5/14/2021 at 3:55 PM, KirkNC said:

Or because there were more buyers then sellers today…..

 

A daily movement in stocks is beyond irrelevant.  The cruise lines stocks had been beat up for several days so they recovered a portion of that. A more meaningful analysis would ask how the lines are going to deal with the billions in debt they had to issue at very high rates and the massive dilution to existing shareholders as they issued hundred of millions of new shares.  The answer is not pretty. 

Kirk couldn't agree with you more . It will take many years  for the cruise lies to pay off  the huge debt ,Then there is the dilution of shares  .Far better stocks to invest into than cruise line stocks 

[KirkNC]

4 minutes ago, mcrcruiser said:

Kirk couldn't agree with you more . It will take many years  for the cruise lies to pay off  the huge debt ,Then there is the dilution of shares  .Far better stocks to invest into than cruise line stocks 

I am concerned how it translates into pricing.  I have not put a pencil to it but someone probably has to answer the question of how much additional money must CCL earn to cover their additional interest payments and the dilution of new shares issued to arrive at the same EPS they had pre-pandemic.  I would not be surprised if the number is well north of 50% additional earnings.  Now how do we think they will make up this huge short fall?  It’s a problem all three major lines have so they are all in the same “boat”.  It will make a line like Azamara interesting as they were bought on the cheap ($300 million), have added an additional ship and have none of the debt.  This should give them a real competitive advantage in pricing.

[mcrcruiser]

7 minutes ago, KirkNC said:

I am concerned how it translates into pricing.  I have not put a pencil to it but someone probably has to answer the question of how much additional money must CCL earn to cover their additional interest payments and the dilution of new shares issued to arrive at the same EPS they had pre-pandemic.  I would not be surprised if the number is well north of 50% additional earnings.  Now how do we think they will make up this huge short fall?  It’s a problem all three major lines have so they are all in the same “boat”.  It will make a line like Azamara interesting as they were bought on the cheap ($300 million), have added an additional ship and have none of the debt.  This should give them a real competitive advantage in pricing.

Absolutely ,those with no debt loads or small debt loads always are in better position to gain market share ;as they can use those dollars that go to service debt loads   to expand their offerings  & at lower costs   .Thus ,we will no doubt see the rise of  very stiff competition  from the likes pf  MSC  or  Virgin  ie

[rkacruiser]

2 hours ago, KirkNC said:

It will make a line like Azamara interesting as they were bought on the cheap ($300 million), have added an additional ship and have none of the debt.  This should give them a real competitive advantage in pricing.

 

An interesting post, I think.  When I think of Azamara, I remember comments made by friends, experienced cruisers,  who sailed on them when they were Renaissance Cruise ships.  Not much positive was what I learned.  Too small, now too dated in comparison with the cruise lines with which they may compete.  Product pricing?  Ought to be competitive with what they offer.  As an investment in a company that bought them?  🤣  I think not!

 

Of course, this is just my opinion.  Keep in mind my MBA was awarded by Timbucktu University.   

[KirkNC]

1 hour ago, rkacruiser said:

 

An interesting post, I think.  When I think of Azamara, I remember comments made by friends, experienced cruisers,  who sailed on them when they were Renaissance Cruise ships.  Not much positive was what I learned.  Too small, now too dated in comparison with the cruise lines with which they may compete.  Product pricing?  Ought to be competitive with what they offer.  As an investment in a company that bought them?  🤣  I think not!

 

Of course, this is just my opinion.  Keep in mind my MBA was awarded by Timbucktu University.   

Certainly not recommending them as an investment , you can’t as they were bought by a private equity firm, a concern in itself.  I was just throwing them out as a no debt/dilution line as opposed to CCL/RCI/NCL.  Viking could be another one.

Edited May 18, 2021 by KirkNC

[papadave]

While I own stock in all 3 companies because the shareholder benefit of credit to your onboard account for as many cruises as you take is a good deal, the value of each of these companies today as investments is questionable.    Very high negative earnings per share, a bit of smoke and mirrors when it comes to the outlook over the next few years -- bookings are high, but many of those bookings were bought and paid for a year or two ago and are actually further discounted because of the added value given to future cruise credits on rebooked cruises -- I really don't know how the stock price will keep rising.   As an industry they are vulnerable to rising fuel prices, increased expense as they start to bear more responsibility for mitigating environmental damage caused by cruising, service on debt, etc.    When they issue additional shares to raise revenue, the price of outstanding shares should drop.   However, the stock market is no longer based on investment fundamentals, so the stock price could hold and climb.   You could probably make more money buying when the stock is down by a dollar a share, selling when it goes up by a dollar a share, then repeating this 1,000 times.

[rkacruiser]

20 hours ago, papadave said:

Very high negative earnings per share, a bit of smoke and mirrors when it comes to the outlook over the next few years -- bookings are high, but many of those bookings were bought and paid for a year or two ago and are actually further discounted because of the added value given to future cruise credits on rebooked cruises -- I really don't know how the stock price will keep rising.   As an industry they are vulnerable to rising fuel prices

 

20 hours ago, papadave said:

service on debt, etc.    When they issue additional shares to raise revenue,

 

In your post, you list the things that are of concern to me.  Service on debt is going to be a drag on earnings for some time, I think.  Those earnings will be diluted by the additional shares that have been sold.  That impacts those of us who are owners of CCL and RCI for many years.  

 

"Happy Days" will not return for long term cruise line shareholders until the companies are in a financial position to again pay quarterly dividends.  

[papadave]

And yet , so many investors are not considering the fundamentals.   The stock market has become a game for some.   Cruise stock purchased a year ago turned out to be a great investment.   There is still more substance to these companies than you find in Gamestop.   Cruise lines have physical assets of real value.  However, the fundamentals are very bad and if they owe more than they can pay, I wouldn't expect the Federal Government to ensure their survival the way they got behind General Motors  As corporate citizens they don't contribute their fair share to U.S. employment and they don't contribute their fair share in taxes.  It is, as the King of Siam puts it in The King and I, a puzzlement.

 

[rkacruiser]

20 hours ago, papadave said:

However, the fundamentals are very bad and if they owe more than they can pay, I wouldn't expect the Federal Government to ensure their survival the way they got behind General Motors  As corporate citizens they don't contribute their fair share to U.S. employment and they don't contribute their fair share in taxes.  

 

I think it has been made very clear in the past 14-15 months that the Federal Government is not going to the financial rescue of any cruise company that goes bankrupt.  When the Chairman of CCL appealed to his friend, the 45th President of the United States in 2020 for aid for the cruise lines just as the airlines were receiving, the amount of Federal money flowing to the cruise industry was.....$00000000.00.  

 

My opinion as to why this was the result of Mr. Arison's request?  It is because of what you stated, not so much about employment of Americans, but to the Companies' tax situation.  

 

When all of this becomes in our rear view mirror--as it will--historians will sort out the details, the facts, the fictions, etc.  There will be many History graduate students--maybe Business graduate students as well--who will be earning Master's and Doctor's degrees dealing with the issues that the pandemic has caused.