SS/RCCL Finances: Improving, Options, Questions??!!

[saminina]

I believe Seabourn to be on short list of the asset dump list.   I thought this awhile ago, but this new CEO now gives me the courage to put my thoughts in print.  He has previously shifted SB into......

Nope,  enough said.

[RetiredandTravel]

I don't have anything intelligent to say on the cruise line stocks.  What I do know is if the stock market keeps going down like today my next cruise will be in a row boat,  Old Man and the Sea sort of thing

 

Barkeep!!!

 

☹️

 

 

[rkacruiser]

2 hours ago, RetiredandTravel said:

What I do know is if the stock market keeps going down like today my next cruise will be in a row boat,  Old Man and the Sea sort of thing

 

 

You know darn well that "down" will eventually become "up".  Have a few more glasses of wine and enjoy your evening,  

[jpalbny]

3 hours ago, rkacruiser said:

 

You know darn well that "down" will eventually become "up".  Have a few more glasses of wine and enjoy your evening,  

 

I'll drink to that!

[TLCOhio]

9 hours ago, rkacruiser said:

You know darn well that "down" will eventually become "up".  Have a few more glasses of wine and enjoy your evening,  

 

From the Wall Street Journal from late Friday afternoon, below are their charts for a rather rocky and negative week for the three major cruise lines. Yes, a drink will be in order if you are a stockholder.  When will they go back up?

 

THANKS!  Enjoy!  Terry in Ohio

 

Amazon River-Caribbean 2015 adventure live/blog starting in Barbados. Many visuals from this amazing river and Caribbean Islands (Dutch ABC's, St. Barts, Dominica, Grenada, San Juan, etc.).  Now at 69,766 views:

www.boards.cruisecritic.com/showthread.php?t=2157696

 

 

 

[rkacruiser]

10 hours ago, TLCOhio said:

When will they go back up?

 

Does one understand the business model of the companies in which one has invested?  Does one have confidence in the Executives and Board Members who are running those companies?  (And, if you don't, does one vote one's Proxies to indicate your lack of confidence in those Board Members?)  Has one learned from the previous "ups and downs" of the companies/industry in which one has invested?  Is one a long term investor?  If the answer to these questions is "Yes".  Then, the answer to your question is, I believe, "Have Patience".  

[RetiredandTravel]

1 hour ago, rkacruiser said:

 

Does one understand the business model of the companies in which one has invested?  Does one have confidence in the Executives and Board Members who are running those companies?  (And, if you don't, does one vote one's Proxies to indicate your lack of confidence in those Board Members?)  Has one learned from the previous "ups and downs" of the companies/industry in which one has invested?  Is one a long term investor?  If the answer to these questions is "Yes".  Then, the answer to your question is, I believe, "Have Patience".  

 

These stocks aren't immune from the performance of the overall markets.  Friday the Nasdaq broke support and the Dow/S&P are teetering just above support.  This week the US put in the first half of a recession, the stock markets have gone from worrying about inflation to recession to both.    On the positive side investor sentiment is at very low levels, hopefully support holds.  Friday trading between 3 & 4 was frantic and irrational.

 

Edited April 30, 2022 by RetiredandTravel

[rkacruiser]

2 hours ago, RetiredandTravel said:

These stocks aren't immune from the performance of the overall markets. 

 

Agree.

 

2 hours ago, RetiredandTravel said:

This week the US put in the first half of a recession, the stock markets have gone from worrying about inflation to recession to both. 

 

Please understand that my crystal ball has been "in the shop" for so long--supply issues, I have learned--but, a recession is what I expect will be our economic future for awhile.  

 

2 hours ago, RetiredandTravel said:

Friday trading between 3 & 4 was frantic and irrational.

 

Welcome to participating in the Markets!  

[RetiredandTravel]

10 hours ago, rkacruiser said:

 

Welcome to participating in the Markets!  

 

 

Quite used to it actually.  I was a portfolio manager at a major Wall St investment house in 1987 for Black Monday.  Now that was volatility, all down.

 

[rkacruiser]

12 hours ago, RetiredandTravel said:

 

Quite used to it actually.  I was a portfolio manager at a major Wall St investment house in 1987 for Black Monday.  Now that was volatility, all down.

 

 

Oh, I remember that time.  My colleagues who had invested in a 403(b) variable annuity were distressed for quite some time when those "down" days would occur.  Me?  Happy with my decision with a good fixed rate.  Still believe in the "theory of having many pots" for one's resources.  When one "pot" disappoints, it's likely that some of the other "pots" will provide optimism.  

[TLCOhio]

On 5/1/2022 at 7:49 PM, rkacruiser said:

Oh, I remember that time.  My colleagues who had invested in a 403(b) variable annuity were distressed for quite some time when those "down" days would occur.  Me?  Happy with my decision with a good fixed rate.  Still believe in the "theory of having many pots" for one's resources.  When one "pot" disappoints, it's likely that some of the other "pots" will provide optimism.  

 

Appreciate these market experiences, comments and follow-ups from RetiredandTravel and our SW Ohio neighbor.  This past week has not been good, positive and encouraging.  But, "corrections" are to be expected and "normal"?  

 

We have been in Central Florida during the past week doing Disney World and Universal Studios with our grandsons and family for our 50th Wedding Anniversary Celebrations.  Hot and sunny here!!  Like on many cruises, it is not cheap doing these "adventures"!!!

 

Below are stock charts for the past week's trading.  Wall Street still does not see a cruise line recovery to profitability coming soon.  Taking more time?   But, when?

 

THANKS!  Enjoy!  Terry in Ohio

 

AFRICA?!!?: Fun, interesting visuals, plus travel details from this early 2016 live/blog. At 52,639 views. Featuring Cape Town, South Africa’s coast, Mozambique, Victoria Falls/Zambia and Botswana's famed Okavango Delta.

www.boards.cruisecritic.com/showthread.php?t=2310337

 

From the Wall Street Journal late this afternoon, here are the charts for the three major cruise lines during the past five days of trading.  At the bottom, the fourth charts shows RCL values during the past month.  Is this very encouraging for stockholders?:

(Open your screen/viewer wider to see these visuals larger/better!)

 

 

 

Here is the one month chart for the past month of trading with RCL:

[rkacruiser]

2 hours ago, TLCOhio said:

We have been in Central Florida during the past week doing Disney World and Universal Studios with our grandsons and family for our 50th Wedding Anniversary Celebrations.

 

Happy 50th Anniversary to your wife and you!  

 

Have not visited Universal Studios, but, have had two visits to Disney World (not all of the Parks, though).  I enjoyed two visits to Sea World when they were under the AB corporate umbrella. AB's shareholder meetings there provided good memories.  The Park was great; I got splashed at the Killer Whale show.  A visit to Sea World might be of interest to your family.  

[TLCOhio]

On 5/6/2022 at 8:06 PM, rkacruiser said:

Happy 50th Anniversary to your wife and you!  

Have not visited Universal Studios, but, have had two visits to Disney World (not all of the Parks, though). A visit to Sea World might be of interest to your family.  

 

Appreciate this kind follow-up from our SW Ohio neighbor.  Did not have time to do Sea World.  We did five days in all four of the Disney parks or Kingdoms, plus a full day on Friday for the two Universal Studios parks.  That's lots, especially as things in Central Florida had temperatures in the upper 80'sF+.  Rather warm and super sunny!!  Good news?  No rain, nor high humidity. 

 

From the Wall Street Journal late today,, they had this headline: “Stocks Slide to Lowest in 2022 as Rout Continues" with this sub-headline: "Technology, energy shares lead declines as Nasdaq falls more than 4%”.

 

Here were some of their story highlights: "The most punishing market selloff in years showed no signs of abating Monday, with U.S. stock indexes sliding to new lows for 2022 and other assets, like oil and bitcoin, tumbling as well.  Markets have been shaken this year by a flood of investor worries. Inflation is running at its fastest pace in decades, threatening to eat into corporate profits and rein in consumer spending.”

 

But, what about the cruise stocks?  Don't ask!!!  Royal Caribbean dropped to a new low during the past 52 weeks, dropping down more than 12%.  See below.  Also today, Carnival fell 11.8% and Norwegian was down nearly 13%.  Wow!!  I cannot remember any such negative slides happening in that way during recent months.  Reactions?

 

Full story at:

https://www.wsj.com/articles/global-stocks-markets-dow-update-05-09-2022-11652073278?mod=hp_lead_pos1

 

THANKS!  Enjoy??  Terry in Ohio

 

Kotor/Montenegro:  Exciting visual samples, tips, details, etc., for this scenic, historic location. Over 49,152 views.

http://boards.cruisecritic.com/showthread.php?t=1439193

 

From the Wall Street Journal late this afternoon, here is the chart for Royal Caribbean.  Late last week, I asked:  "Is this very encouraging for stockholders?"  But, what about today?  Really bad or even worse?:

(Open your screen/viewer wider to see these visuals larger/better!)

 

Edited May 10, 2022 by TLCOhio

[RetiredandTravel]

All travel and leisure stocks were down yesterday probably in anticipation of a recession, airlines were down 6-8%, hotels 5-8% and six flags 10%.  US Treasury yields were down yesterday while High Yield bond spreads widened, HYG was down 1% (HYG has a 4.3 duration according to ishares).   One could argue that the Fed should have tightened much earlier.  Many of us are old enough to remember serious inflation and know its a painful process to tame.

 

In an interview with the new  RCL CEO Jason Liberty (quoted below) this weekend in Barron's he was asked to sum up business trends this year.  Its interesting how the breakeven has changed with the new debt load.

 

"We are starting to get passenger load factors of 75-80%, at which point you start to generate a lot of cash. When you get to about a 90% load factor, you start to generate profit. Historically, that line of profitability can be lower, roughly 80%. But we have a lot more debt now.  Prior to the pandemic, our annual interest expense was about $300 million or $400 million. Now it’s about $1.1 billion or $1.2 billion. We will burn that off in the coming years. And then this business quickly returns back to the pre-Covid profitability levels."

 

Happy Anniversary Terry!!

 

 

 

 

[AmazedByCruising]

On 5/10/2022 at 1:19 PM, RetiredandTravel said:

All travel and leisure stocks were down yesterday probably in anticipation of a recession, airlines were down 6-8%, hotels 5-8% and six flags 10%. 

 

Yes, but CCL at 14.32? 

 

Quote from: Carnival Will Take Time to Recover From Covid-19 Ship Outbreak (msn.com) :

 

It was recently discovered that Covid-19 was found on board a Carnival cruise. The U.S. Centers for Disease Control and Prevention (CDC) has launched an inquiry. As a result, in the last five trading days, Carnival Corp’s (NYSE:CCL) stock fell 15.5%, and it doesn’t look like the losses will stop anytime soon.

 

Covid! On a ship! That explains 15.5% easily. I wonder how much the author gets paid for this insight.

 

I did some wild calculations. At $14.32, a market cap of 16.6 billion, it's even not impossible for Poland (maybe with the help of the EU) to buy CCL, and have of-the-shelve housing for 223,000 Ukrainian refugees on 87 ships. And those are "lower berths", but when anchored in their own waters every couch can be used, and cradles installed, without looking at official maximum capacity (based on available life boats). Let's say 300k places to sleep with all facilities to feed everyone at the Lido Deck, 55k per person. I'm not in the hotel business, but that sounds really low to me. 3 years at $50/person/night and the property is paid (and a bizarre situation where Poland itself can guarantee 100% occupancy). Certainly, some entrepreneurs will find profitable uses for Casino, MDR, Theatre, and spa, and pay good rent to exploit those, too.

 

Once the war is over, RCCL would be more than happy to buy the ships, and have them dry docked and ready to sell Tanzanite again. And to hire many previous CCL-employees. They wouldn't mind CCL not competing for a while either, so they could even subsidize Poland to get rid of most competition, and have raised prices for a while. 

 

Not saying this is a likely event, but it would be very cool 🙂

 

[rkacruiser]

On 5/10/2022 at 7:19 AM, RetiredandTravel said:

 One could argue that the Fed should have tightened much earlier.  Many of us are old enough to remember serious inflation and know its a painful process to tame.

 

Indeed I do!  My mortgage at 12%, but, CD rates as high as 16%.

 

On 5/10/2022 at 7:19 AM, RetiredandTravel said:

We will burn that off in the coming years. And then this business quickly returns back to the pre-Covid profitability levels."

 

I have listened to enough Quarterly Calls to analysts to say that is an excellent example of a "Forward Looking Statement".  

 

4 hours ago, AmazedByCruising said:

Not saying this is a likely event, but it would be very cool 🙂

 

You have a very creative imagination.  😀

[TLCOhio]

1 hour ago, rkacruiser said:

Indeed I do!  My mortgage at 12%, but, CD rates as high as 16%.

I have listened to enough Quarterly Calls to analysts to say that is an excellent example of a "Forward Looking Statement".  

You have a very creative imagination.  😀

 

Appreciate these great follow-ups and comments.  These are challenging times to be trying to guess the financial futures and longer-term stock values.  Now to focus back on today . . . read below and react as fits your situation.  Need a crying towel?  But, is this an opportunity to buy now and watch things rise?  Or, will values be going lower?

 

From the Wall Street Journal late this afternoon, below is their latest chart.  Another low!!  Below $60.  A new low for the most recent twelve-month period.  Carnival was down 4.5% today.  Norwegian down nearly 5%.  

 

THANKS!  Enjoy!  Terry in Ohio

 

Athens & Greece: Many visuals, details from two visits in a city with great history, culture and architecture.  Now at 44,296 views.

http://boards.cruisecritic.com/showthread.php?t=1101008

 

From the Wall Street Journal late this afternoon, here is what their chart says for Royal Caribbean today and during the period since the first of this year.  Below $60!!  That a new low during the most recent twelve months.:

(Open your screen/viewer wider to see this visual larger/better!)

Edited May 11, 2022 by TLCOhio

[rkacruiser]

2 hours ago, TLCOhio said:

Now to focus back on today . . . read below and react as fits your situation.  Need a crying towel?

 

Need a crying towel?  No.  My investments in cruise line stocks have never supplied the basis for my financial security.  

 

 I am a practitioner of having many "pots" that are well diversified.  

 

Would I enjoy reading better news?  Well, of course.  As the guest loads increase and the financial winds against the entire Market become less fierce, I expect a better day "tomorrow" for RCI and CCL.  Whenever that may be.  NCLH?  Might the Aponte family become interested in them?   

[TLCOhio]

On 5/11/2022 at 7:49 PM, rkacruiser said:

Need a crying towel?  No.  My investments in cruise line stocks have never supplied the basis for my financial security.  

I am a practitioner of having many "pots" that are well diversified.  

Would I enjoy reading better news?  Well, of course.  As the guest loads increase and the financial winds against the entire Market become less fierce, I expect a better day "tomorrow" for RCI and CCL.  Whenever that may be.  NCLH?  Might the Aponte family become interested in them?   

 

From the Wall Street Journal yesterday, the stock market continues to beat the hell (excuse my language, but it is true) out of the cruise ship stocks.  What do they know, expect and predict for the rocky waters ahead based on the falling Wall Street valuations?

 

As shown below, RCL went down to nearly $56 early yesterday morning before rebounding a littler from that all-time, recent low.  Carnival was down 2.14% yesterday.  Norwegian dropped 4.22% Thursday.  WOW!!  When will these downward slides stop?  The cruise stock are dropping much more than the overall market!!  Is it oil prices rising?  Inflation squeezing out potential leisure spending?  Continued Covid worries?  Interest rates rising making managing debt more costly?  Europe/war worries?  All of above?  What other factors am I missing for causing these negative cruise stock trends?  How safe are all of the FCC's as future cruise credits and advanced deposits are in the hands of these challenged cruise lines?

 

THANKS!  Enjoy??  Terry in Ohio

 

Lisbon, NWSpain, Bordeaux/Brittany: Live/blog, June 2017 from Portugal to France along scenic Atlantic Coast on the Silver Spirit.  Now at 32,305 views.  Many interesting pictures, details for history, food, culture, etc.:

www.boards.cruisecritic.com/showthread.php?t=2511358

 

From the Wall Street Journal, here is their chart reflecting how Royal Caribbean dropped, AGAIN, in trading yesterday.:

(Open your screen/viewer wider to see this visual larger/better!)

Edited May 13, 2022 by TLCOhio

[TLCOhio]

From this financial website connected below mid-day yesterday, they had this headline: “Why Carnival, Norwegian Cruise, and Royal Caribbean Stocks Got Torpedoed on Thursday” with this quick summary: “the blame for all this selling probably lies at the foot of Norwegian's gangway.”

 

Here is more from their analysis: "Norwegian Cruise Line Holdings reported its Q1 2022 earnings on Tuesday. Investors were happy to hear it -- bidding up Norwegian stock nearly 10% at one point -- but the news still wasn't great. Norwegian missed on revenues, reporting only $522 million where Wall Street wanted $655 million. Its quarterly loss of $1.82 per share (pro forma) was worse than expected, too. And to top it all off, Norwegian told investors it will lose money in Q2 as well."

 

Ouch?

 

But, here are some positives: "There's good news for cruise line investors. Giving commentary on its earnings Tuesday, Norwegian confided that it's seeing 'strong' consumer spending on board its ships, 'snapping back and even exceeding where we left off in 2019.' Q2 2022 may be a bit rough for Norwegian, granted, but already CEO Frank Del Rio is predicting record financial performance in 2023, as CruiseIndustryNews.com reported today. And demand for cruise services is in fact looking so strong that the company plans to increase its guest capacity by 50% through 2027.  Nor is Norwegian an outlier. Carnival subsidiary Princess Cruises agrees that consumer demand looks robust, saying more than half its customers are voluntarily paying an extra $50 or even $75 for a 'Princess Plus' or 'Princess Premier' package that deliveries additional services on board. That translates into multiple hundreds of dollars per passenger over a multiday excursion and confirms what Norwegian was saying about consumer demand being strong.  All that said, I do get why investors are starting to turn pessimistic about cruise stocks again. As recently as January, Wall Street analysts were telling us that both Norwegian and Royal Caribbean stocks would be profitable again as early as Q2 of this year -- but that's clearly not going to happen.  Things should start to settle down in 2023 and thereafter. And with Norwegian, for example, selling for less than nine times 2023 estimated earnings, Carnival costing 9x 2023 earnings on the nose, and Royal Caribbean valued just a bit over 10x, there's still hope that these stocks will reward investors. You just may need to wait another year to see it."

 

Full story at:

https://www.fool.com/investing/2022/05/12/carnival-stock-royal-caribbean-and-norwegian-drop/

 

THANKS!  Enjoy!  Terry in Ohio

 

Panama Canal? Early 2017, Fort Lauderdale to San Francisco adventure through Panama Canal.  Our first stops in Colombia, Central America and Mexico, plus added time in the great Golden Gate City. Now at 31,276 views.

http://boards.cruisecritic.com/showthread.php?t=2465580

[saminina]

Terry,  you could not have waited three hours to do your post?

[Lois R]

Hi Terry, wishing you Belated Happy Anniversary wishes! 50 years! That is simply awesome😀

[frantic36]

9 hours ago, TLCOhio said:

Norwegian missed on revenues, reporting only $522 million where Wall Street wanted $655 million. Its quarterly loss of $1.82 per share (pro forma) was worse than expected, too. And to top it all off, Norwegian told investors it will lose money in Q2 as well."

 

 

Totally not unexpected but of course whenever a company reports less then expected quarterly earnings they get hammered by all the day traders and people that like to short the market or panic sellers. Best to look medium to long term but people are greedy and want what they want NOW. 

[frantic36]

6 hours ago, saminina said:

Terry,  you could not have waited three hours to do your post?

 

Some of us have built up cash reserves just waiting because we knew with the market overpriced before  things were going to turn. Especially with the uncertainty in the world. But, as rkacruiser said, the market is cyclical and best if you can just ride it.  You do seem to look to at the negative a lot.

[rkacruiser]

11 hours ago, TLCOhio said:

How safe are all of the FCC's as future cruise credits and advanced deposits are in the hands of these challenged cruise lines?

 

I have little sympathy for those who chose to accept FCCs instead of a refund if that opportunity occurred and now may find those Credits may be worthless.  "A bird in hand is worth two in the bush."  I have some money "invested" in both Princess and HAL advance deposits.  Interest rates for consumer savings have not risen to the point that it would be worthwhile to request those dollars to be returned.  

 

1 hour ago, frantic36 said:

But, as rkacruiser said, the market is cyclical and best if you can just ride it.  

 

This situation is an example of a "movie I have seen before".