ESCAPE - September 9th Bermuda - TS/H Florence

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1,491 Posts
Joined May 2011
Originally posted by dfoxinator
Haha, yeah, I kind of feel like that. And "filled ships" and selling out cruises is not a direct indicator of a strong business. It speaks nothing to their retention, profitability, etc. You can fill as many ships as you want if you invest tons in marketing, but that's the difference between profitability and margins. Going back to what you pointed out before, retention is extremely important. I think someone got confused about customer acquisition costs. From my understanding, it is sometimes cheaper to acquire a new customer compared to bringing back a customer who has stopped using your service or who has a negative opinion of your service. That's not to be confused though with customer retention. Retaining customers (ones who have generally enjoyed your service) is significantly cheaper than acquiring new ones, from everything I know. Retaining vs bringing back customers who have moved on is not the same thing, and I think the person before might have confused the two. I'm guessing, by many of the posts in this forum, NCL has a retention problem and that's going a long way to sinking their valuation.



Very interesting. Seems to make sense - after 2015 now or any time recently seems like a bad time to buy. It wouldn't be surprising if the stock took another dive I think. Also interesting about other cruise lines. You're definitely correct. RCL just seems to be a much stronger, high growth stock. I guess their customer-centric approach is working... I wonder what their retention looks like compared to NCL.


They are taking my dollars away from ncl in 2019 this I will tell you


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276 Posts
Joined May 2011
Originally posted by maggie cruises
They are taking my dollars away from ncl in 2019 this I will tell you


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We only used NCL because they spent the most time in Bermuda. But now Carnival goes there for the same amount of time, so next spring we plan to give Carnival our money because we always had a great time on their ships. Much cheaper (plus their cases of water only cost $4.99, not $27), and we thought their food was better. I have even unsubscribed from NCL's emails -- just not interested in their "sales" and promos. Since we don't do drink packages, and their specialty dining this last cruise was just so-so, NCL is no longer attractive nor cost-effective to us plain and simple.
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Boston
255 Posts
Joined Aug 2016
Originally posted by PATRLR
Doubtful they were using any metric other than their love of NCL.
I have looked, and to my untrained eye, NCL doesn't look good, especially when you compare to other cruise lines. More importantly, when I asked my financial adviser to buy 100 shares of NCL so I could get the on-board credit, he advised very strongly against investing in NCL - none of their research indicated it was a company to invest in.
I know I said I was done with this thread, but statements like this warrant a response. The key to your response is "untrained eye." And if your financial adviser simply said "don't buy" without asking further questions about your goals/strategy, you should consider firing him/her. Are you a growth investor? A GARP investor? A value investor? Are you looking for a tex efficient portfolio? These are HUGE facts that one needs to consider. I ask because I work at one of the nation's largest asset managers and, in my role, I am fortunate enough to sit in on certain Board committee meetings where PMs discuss their funds, holdings, and philosophy on a annual basis with the Trustees (and I have learned a ton). As you would imagine, a few of these funds have leisure exposure. NCLH is in almost all our value strategies. CCL and RCL are in certain of our growth portfolios (sometimes RCL makes it into a value portfolio, but never CCL).

It is not hard to see why. In terms of financial ratios and overall corporate health CCL is currently far better off than either RCL or NCLH (their debt to equity ratio is amazingly low). RCL and NCLH are considered value plays because their investments in their products far outpaces CCL (and is why their debt to equity ratios are far higher). CCL is a solid growth stock, but RCL and NCLH are considered by many analysts to be solid value picks.

The cruise line that is by far the worst positioned for the future is MSC. Although they are a private company, they do make available financial statements annually and their debt to equity ratio is astronomical. Like 300-400% higher than all major cruise lines. They are making a big gamble that their extensive investment in an effort to expand to North America will pay off. If the economy stays solid for the next 5-8 years I think they should do very well, but if the economy turns, their debt leverage is crushing.

All this is just to say, no stock is a buy, hold or a sell simply based on its price. Further, the price of a stock has absolutely zero to do with perceived customer service standards (prices are set in the market based on underlying fundamentals). Also, any investment adviser worth his or her salt will tell you the role that the security would play in your portfolio is as important as anything. Hell, in some of our managed accounts we purposely buy stocks we think will decrease in value so we can harvest the losses for tax purposes to offset unrealized gains in other positions in the portfolio.
13 Posts
Joined Sep 2018
Originally posted by Enavigo
I know I said I was done with this thread, but statements like this warrant a response.
Hmmm, interesting. You said you were done with the thread yet felt the need to refute the single statement which was “I was told NCL stock was a bad buy.” I wonder why that might be. Combined with your NCL-can-do-no-wrong attitude, I think I see what’s going on here. How many shares of NCL do you own?

You also seemed to not address the original point, which was “NCL must be running a good business because they fill lots of ships, so everything they are doing is perfect including their customer service.” My argument against that was simple - NCL’s stock price is lower now than it was 3 years ago. Is that the trend of a company that’s executed perfectly and has no room for improvement? I’m sure investors who bought the stock 3-4 years ago and purchased a dud to-date wouldn’t think they are executing perfectly.
Birmingham, AL
343 Posts
Joined Jan 2017
Originally posted by dfoxinator
Hmmm, interesting. You said you were done with the thread yet felt the need to refute the single statement which was “I was told NCL stock was a bad buy.” I wonder why that might be. Combined with your NCL-can-do-no-wrong attitude, I think I see what’s going on here. How many shares of NCL do you own?

You also seemed to not address the original point, which was “NCL must be running a good business because they fill lots of ships, so everything they are doing is perfect including their customer service.” My argument against that was simple - NCL’s stock price is lower now than it was 3 years ago. Is that the trend of a company that’s executed perfectly and has no room for improvement? I’m sure investors who bought the stock 3-4 years ago and purchased a dud to-date wouldn’t think they are executing perfectly.

NCL's stock 3 years ago today was around $61/share. Four years ago it was around $36/share. Today, it closed at $57.46 a share...

Do you even bother to research things before you comment on them?
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Thomas Roberts

Carnival Holiday - March 2005 - 4-Day Western Caribbean
Carnival Holiday - October 2007 - 5-Day Western Caribbean
NCL Star - November 2012 - 7-Day Western Caribbean
NCL Epic - March 2013 - 7-Day Eastern Caribbean
NCL Epic - November 2014 - 7-Day Western Caribbean
NCL Pearl - February 2016 - 3-Day Bahamas
NCL Dawn - November 2016 - 9-Day Western Caribbean
NCL Escape - November 2017 - 7-Day Western Caribbean
NCL Dawn - January 2019 - 10-Day Southern Caribbean
NCL Encore - November 2019 - 7-Day Eastern Caribbean

Wish List:
Alaska
Panama Canal
Mediterranean
Baltic
13 Posts
Joined Sep 2018
Originally posted by rtkenmore
NCL's stock 3 years ago today was around $61/share. Four years ago it was around $36/share. Today, it closed at $57.46 a share...
What's your point? It's still not even at its all-time high and has been working its way back there (and still isn't there) for 3 years. Does a stock trading below it's all-time high which was about 3 years ago shout high-growth, well-executed business to you? In 2015 the company was worth almost $15 billion. It's now worth less than $13 billion. Again, is that the indicator of a company that's done everything correctly and who's piss poor customer service shouldn't be called out because they are "filling ships"?
Boston
255 Posts
Joined Aug 2016
Originally posted by dfoxinator
Hmmm, interesting. You said you were done with the thread yet felt the need to refute the single statement which was “I was told NCL stock was a bad buy.” I wonder why that might be. Combined with your NCL-can-do-no-wrong attitude, I think I see what’s going on here. How many shares of NCL do you own?

You also seemed to not address the original point, which was “NCL must be running a good business because they fill lots of ships, so everything they are doing is perfect including their customer service.” My argument against that was simple - NCL’s stock price is lower now than it was 3 years ago. Is that the trend of a company that’s executed perfectly and has no room for improvement? I’m sure investors who bought the stock 3-4 years ago and purchased a dud to-date wouldn’t think they are executing perfectly.
I own 0 shares of NCLH, or any individual securities for that matter. Pre-clearance is basically impossible at my firm as one of our funds is most certainly trading that day (or has within the past 7 days or expects to within the next 7). My accounts are mutual fund-only accounts. And it's not a "NCL can do no wrong attitude" I have, it's a more realistic understanding of rational business behavior and I understand the terms and conditions of what I buy.

As for your continued reliance on stock price as some sort of barometer for customer service or any emotional variable, all I can say is that is severely misguided. Stock price is about fundamentals ... nothing else. I too can cherry pick arbitrary time periods to evaluate stock price in an attempt to bootstrap my argument. For example, CCL is down $4 per share over the past 1-year period, while both NCLH and RCL are up. NCLH and RCL currently have much higher momentum scores than CCL. CCL's issues have nothing to do with service levels or perceived customer harms, it relates to unique corporate charges they were required to take in 2017.

Finally, your 3-year period is also misleading. Yes, NCLH is down over that period, but that had absolutely nothing to do customer service concerns on NCL or some other systemic customer service failure. It fell because of a risky strategic decision. The price fell 40% in 2016 and is still recovering for one large reason . .. China. NCL took a bigger gamble than its competitors. It went more aggressively into China (including designing the Joy exclusively for China). When demand in China fell and the government considered taking over the cruising industry entirely, ALL cruise line stocks took a hit, but NCLH much more so than the others because of their aggressive play into China. NCLH has said on the record that was a mistake and it is one they are still paying for.
Birmingham, AL
343 Posts
Joined Jan 2017
Originally posted by dfoxinator
What's your point? It's still not even at its all-time high and has been working its way back there (and still isn't there) for 3 years. Does a stock trading below it's all-time high which was about 3 years ago shout high-growth, well-executed business to you? In 2015 the company was worth almost $15 billion. It's now worth less than $13 billion. Again, is that the indicator of a company that's done everything correctly and who's piss poor customer service shouldn't be called out because they are "filling ships"?
You do know there is a lot more to a companies financial health than just their "worth", right? Over the last four quarters they've had net profits in excess of $800 million on revenue approaching $6 billion. Their profits and revenues over the last four quarters have all been up year over year. And no, they may not be at their all time high but they are not far from it.
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Thomas Roberts

Carnival Holiday - March 2005 - 4-Day Western Caribbean
Carnival Holiday - October 2007 - 5-Day Western Caribbean
NCL Star - November 2012 - 7-Day Western Caribbean
NCL Epic - March 2013 - 7-Day Eastern Caribbean
NCL Epic - November 2014 - 7-Day Western Caribbean
NCL Pearl - February 2016 - 3-Day Bahamas
NCL Dawn - November 2016 - 9-Day Western Caribbean
NCL Escape - November 2017 - 7-Day Western Caribbean
NCL Dawn - January 2019 - 10-Day Southern Caribbean
NCL Encore - November 2019 - 7-Day Eastern Caribbean

Wish List:
Alaska
Panama Canal
Mediterranean
Baltic
13 Posts
Joined Sep 2018
Originally posted by Enavigo
As for your continued reliance on stock price as some sort of barometer for customer service or any emotional variable
I never said stock price is a barometer for customer service. I merely said that it was an indicator of how strong the business has been in the past/is now, and a company who has a market cap that's lower now than it was 3 years ago hasn't made good business decisions along the way. You proved my point correct by pointing out their China misstep. It seems reasonable to believe they've made more than a single mistake in the history of their company that's put them in this position. Obviously I can't prove it's because of poor customer service, because I'd need additional numbers like marketing spend and retention rates relative to other cruise lines in order to calculate that.

The point is simple: you, and anyone else, has no grounds to argue that questioning NCL's business practices and customer service is a flawed premise just because they fill ships. Simple put, they are worth less money now than they were 3 years ago and there's various reasons for that, and almost all of them will boil down to bad business decisions, whether it be China like you described or a possible retention/high marketing cost problem. More than likely there are multiple factors. But there's literally nothing to suggest it's unfair to question their business practices, and it's clear numerous things have gone wrong for them and other cruise lines have grown their businesses better.
Boston
255 Posts
Joined Aug 2016
Originally posted by dfoxinator
What's your point? It's still not even at its all-time high and has been working its way back there (and still isn't there) for 3 years. Does a stock trading below it's all-time high which was about 3 years ago shout high-growth, well-executed business to you? In 2015 the company was worth almost $15 billion. It's now worth less than $13 billion. Again, is that the indicator of a company that's done everything correctly and who's piss poor customer service shouldn't be called out because they are "filling ships"?
Your lack of financial literacy is showing. You cannot simply cherry pick time periods without a complete understanding of what the company was doing throughout the time period you select. You seem to do this quite a bit in an attempt to justify your arguments -- it's overly simplistic. You seem drawn to the "all-time highs," which shows you have little understanding of the concept of reinvestment.

Go back to 2013, NCLH net worth is almost 300% higher today than it was then (still means nothing to me, but whatever). Your time period is misleading because a simple review of their annual reports would show you why the net worth dropped in 2016; they took out a large amount of debt to finance their growth (it's right there in black and white). That debt is a direct hit to their net worth, but it is not because they are FAILING it is because they are GROWING. As my Dad always said . . . you have to spend a buck to make a buck.

And before you say look at CCL and RCL, don't. As for the product they offer it is a fair comparison, but NCLH is the younger sister of those two, just look at the market cap differences! NCLH has to grow at a rate greater than either CCL or RCL simply to catch up (again, why most analysts think NCLH is a great value pick while CCL and RCL are more suited to growth investors).
13 Posts
Joined Sep 2018
Originally posted by rtkenmore
You do know there is a lot more to a companies financial health than just their "worth", right? Over the last four quarters they've had net profits in excess of $800 million on revenue approaching $6 billion. Their profits and revenues over the last four quarters have all been up year over year. And no, they may not be at their all time high but they are not far from it.
Yes, but when a company is worth less than they were 3 years ago, you generally accept that things haven't gone great for them and bad decisions/execution took place in the companies semi-recent past. And being "not far from" your market cap from 3 years ago isn't any kind of achievement.
Boston
255 Posts
Joined Aug 2016
Originally posted by dfoxinator
I never said stock price is a barometer for customer service. I merely said that it was an indicator of how strong the business has been in the past/is now, and a company who has a market cap that's lower now than it was 3 years ago hasn't made good business decisions along the way. You proved my point correct by pointing out their China misstep. It seems reasonable to believe they've made more than a single mistake in the history of their company that's put them in this position. Obviously I can't prove it's because of poor customer service, because I'd need additional numbers like marketing spend and retention rates relative to other cruise lines in order to calculate that.

The point is simple: you, and anyone else, has no grounds to argue that questioning NCL's business practices and customer service is a flawed premise just because they fill ships. Simple put, they are worth less money now than they were 3 years ago and there's various reasons for that, and almost all of them will boil down to bad business decisions, whether it be China like you described or a possible retention/high marketing cost problem. More than likely there are multiple factors. But there's literally nothing to suggest it's unfair to question their business practices, and it's clear numerous things have gone wrong for them and other cruise lines have grown their businesses better.
*pounds head against the wall*
Boston
255 Posts
Joined Aug 2016
Originally posted by dfoxinator
Yes, but when a company is worth less than they were 3 years ago, you generally accept that things haven't gone great for them and bad decisions/execution took place in the companies semi-recent past. And being "not far from" your market cap from 3 years ago isn't any kind of achievement.
100% wrong. It CAN be an indicator that something is gone, but not when a company makes a significant reinvestment in their business (in the form of secured debt) in order to capture larger market share in the future. You are cherry picking NCLH's growth cycle.
13 Posts
Joined Sep 2018
Originally posted by Enavigo
Go back to 2013, NCLH net worth is almost 300% higher today than it was then (still means nothing to me, but whatever). Your time period is misleading because a simple review of their annual reports would show you why the net worth dropped in 2016; they took out a large amount of debt to finance their growth (it's right there in black and white). That debt is a direct hit to their net worth, but it is not because they are FAILING it is because they are GROWING. As my Dad always said . . . you have to spend a buck to make a buck.
That's completely ridiculous and if you know anything about stocks, you know that. You're literally explaining what would be considered a growth stock. A company that is actively investing and might be shedding some cash because of that but is expected to grow rapidly from that investment. If investors believed NCL's premise and potential growth, the stock would go up and the market cap would go up. What are you arguing? That a company can't make an investment in their future and have their stock go up? Absolute insanity. That's almost every tech company you're describing. You're just making stuff up because investors clearly didn't like and see the potential in the debt NCL took on (or whatever investments they made), or are weary of how successful their endeavors will be.
Boston
255 Posts
Joined Aug 2016
Originally posted by dfoxinator
That's completely ridiculous and if you know anything about stocks, you know that. You're literally explaining what would be considered a growth stock. A company that is actively investing and might be shedding some cash because of that but is expected to grow rapidly from that investment. If investors believed NCL's premise and potential growth, the stock would go up and the market cap would go up. What are you arguing? That a company can't make an investment in their future and have their stock go up? Absolute insanity. That's almost every tech company you're describing. You're just making stuff up because investors clearly didn't like and see the potential in the debt NCL took on (or whatever investments they made), or are weary of how successful their endeavors will be.
Ummm, you know that "growth stocks" are securities whose SHARE PRICE is expected to grow at a significantly above-average rate. Net worth does not always move consistent with stock price (they do not correlate in the manner you suggest). For example, a company's net worth can go down while it's share price increases . . . like, oh I don't know . . . any time a company conducts are significant share buyback (net worth = assets - liabilities ... the calculation excludes shareholder equity).

I'm really done now. Had I realized you joined this month apparently only to complain about NCL I would have simply ignored you. I try to help out people here when I can (because I have received so much great information from so many great contributors on here), but lesson learned. Don't feed the trolls . . . they have insatiable appetites!
13 Posts
Joined Sep 2018
Originally posted by Enavigo
Ummm, you know that "growth stocks" are securities whose SHARE PRICE is expected to grow at a significantly above-average rate. Net worth does not always move consistent with stock price (they do not correlate in the manner you suggest). For example, a company's net worth can go down while it's share price increases . . . like, oh I don't know . . . any time a company conducts are significant share buyback (net worth = assets - liabilities ... the calculation excludes shareholder equity).
Except that's not what happened in this case... NCL's share price went down as did their market cap because they are simply worth less as a company today than 3 years ago. You even admitted this yourself when you spoke about their China snafu.

And I'm sure you'll be back if someone else speaks negatively about the NCL stock.

I signed up to discuss this cruise with other people who were on it, and I expressed my opinion about the poor customer service that I thought NCL exhibited, and that opinion was shared by many here. Some people, like yourself, chose to take a negative attitude towards those who were unhappy instead of just understanding that people look for different things on cruises, and this one will have satisfied some people while leaving others wanting more. And none of those people have an uneducated opinion. I'm not sure why that's a concept some don't want to grasp here.
465 Posts
Joined Mar 2009
Originally posted by Enavigo
The key to your response is "untrained eye."
You left out the word "my". The initial comment was about MY untrained eye.
And if your financial adviser simply said "don't buy" without asking further questions about your goals/strategy, you should consider firing him/her.
Thank you for the advice. Rest assured my adviser and I have had and continue to have extensive discussions about my goals and strategies, including my goal for buying NCL for which we developed a strategy.

Look, my point was simply filling ships is not an indicator of a good business as people on these boards have stated. I acknowledge that neither stock price nor anyone's buy/sell recommendation alone is a good indicator either. Hell, there are entire schools dedicated to teaching Business, we sure aren't going to define whether NCL is a running good business here.
35 Posts
Joined Mar 2003
Wow arguing about obvisiouly two different opinions of NCL. Did any of you read my post of not having 911 available for a very sick 73 year old on the ship? Does that not concern you. Probably not if it did not happen to you. Let me tell you quite scary, and NCL will never be an option for me again. Now that is the service we did not get.
Boston
255 Posts
Joined Aug 2016
Originally posted by PATRLR
You left out the word "my". The initial comment was about MY untrained eye. Thank you for the advice. Rest assured my adviser and I have had and continue to have extensive discussions about my goals and strategies, including my goal for buying NCL for which we developed a strategy.

Look, my point was simply filling ships is not an indicator of a good business as people on these boards have stated. I acknowledge that neither stock price nor anyone's buy/sell recommendation alone is a good indicator either. Hell, there are entire schools dedicated to teaching Business, we sure aren't going to define whether NCL is a running good business here.
Having had the benefit of a few hours sleep and re-reading your post, I was too harsh in my response to your post. I know you are not looking for it, but, for what it's worth, I offer my apologies.
Boston
255 Posts
Joined Aug 2016
Originally posted by peachy5361
Wow arguing about obvisiouly two different opinions of NCL. Did any of you read my post of not having 911 available for a very sick 73 year old on the ship? Does that not concern you. Probably not if it did not happen to you. Let me tell you quite scary, and NCL will never be an option for me again. Now that is the service we did not get.
I do not think people are forgetting about your experience, it is just that there is not much positive we can add other than I'm sorry you went through that. If that had happened to me or my loved ones, in any situation cruise or otherwise, I probably would take my business elsewhere just like you.