RCL Stock -- a bargain!

[gillianrose]

If you are not knowledgeable about stocks, it would not be a wise idea to purchase 100 shares of RCL just to get credit for a 7 day cruise. It is a huge perk to people who sail often and end up receiving thousands of dollars in on board credit over time, but if you try to do this just for a cruise or two, you may end up losing money.

 

It is a good perk for people who cruise VERY often, but in order to reap THOUSANDS of dollars (translated here as being an absolute minimum of $2,000 in benefits), a shareholder would have to take the following minimum number of sailings (on ships other than the Xpedition, which is excluded from the shareholder benefit):

 

8 SAILINGS OF 14 OR MORE NIGHTS (8 x $250 = $2,000) or

10 SAILINGS OF 9 to 13 NIGHTS (10 x $200 = $2,000) or

20 SAILINGS OF 6 to 8 NIGHTS (20 x $100 = $2,000) or

40 SAILINGS of 5 NIGHTS OR LESS (40 x $50 = $2,000)

 

or some combination of the above, of course.

 

With this $2,000 in benefit calculation, (in order to get THOUSANDS of dollars in benefits), the maximum daily stateroom credit is $22.22. The winning amount of sailings to get that?

 

10 SAILINGS of 9 NIGHTS. Each of those 9 nights earns $22.22 stateroom (not individual) credit.

 

Of course, do whatever combination you enjoy, and keep in mind that if you do a 12-day cruise you will get double Captain's Circle credit for the sailing (or more, depending on category sailed), etc. (And yes, there are other permutations of these, too.) Thus, if your goal is to one day be "the passenger with the most sailings", to sit at the Captain's table, to have cruise forum bragging rights, then by all means go for it. :rolleyes:

 

But speaking strictly of SHAREHOLDER BENEFITS, I think the above calculations are correct.

 

$38.45 is the current RCL price here, so those 100 shares will cost you $3,845.00 plus the fee to purchase.

 

See, I DID look into RCL as an investment. :)

[Gonzo70]

It is a good perk for people who cruise VERY often, but in order to reap THOUSANDS of dollars (translated here as being an absolute minimum of $2,000 in benefits), a shareholder would have to take the following minimum number of sailings (on ships other than the Xpedition, which is excluded from the shareholder benefit):

 

See, I DID look into RCL as an investment. :)

 

Keep in mind however that the benefit can be terminated at any time, so even if you plan to take 30 cruises over the next 10 years, the benefit could be cancelled in a few months and money can still be lost. There is still risk involved even for frequent cruisers up until the point you end up with so much shareholder credit that it pays for the stock (as is the case for some people who have been using the credit for years already).

[lysolqn]

Companies aren't American, so why should they sail near America with it's weak currency instead of Europe with Euro?:(

 

The travel industry is one of the first to feel the effects of a slowing economy; for the most part, travel is a luxury, not a necessity. Add to that an already weak US dollar with a pitiful exchange rate against the Euro and just about every other currency. Now factor in the higher per diem rate that Europe commands, fuel surcharges and the cost of flying to Europe from the US. All things considered, the cruise lines may soon find that Americans (who make up at least 50%, if not more, of the passenger load in Europe) are choosing to vacation a lot closer to home - or choosing not to vacation at all. Of course there are no guarantees, but if they take ships out of Europe and bring them closer to home (US), they MAY have an easier time filling all those berths on all those ships.

[gillianrose]

Keep in mind however that the benefit can be terminated at any time, so even if you plan to take 30 cruises over the next 10 years, the benefit could be cancelled in a few months and money can still be lost. There is still risk involved even for frequent cruisers up until the point you end up with so much shareholder credit that it pays for the stock (as is the case for some people who have been using the credit for years already).

 

Hey, knock it off! You are thinking like an investor who cruises, not a cruiser who invests. :)

 

As I said, I took a look-see at RCL as an investment.

 

Did I buy? NO!

 

I am an investor who enjoys an occasional cruise, and I am guessing you are, too. I don't see that the benefits outway the possible downside. That's why I still prefer other companies and managers.

 

Now, if RCL were to go TOTALLY smokefree, I would HAVE to invest in the company, since I would put my money where my mouth is, and that would be as important to me as the money invested. Maybe moreso.

[negc]

Keep in mind however that the benefit can be terminated at any time, so even if you plan to take 30 cruises over the next 10 years, the benefit could be cancelled in a few months and money can still be lost. There is still risk involved even for frequent cruisers up until the point you end up with so much shareholder credit that it pays for the stock (as is the case for some people who have been using the credit for years already).

 

Of course it can be terminated at any time, but if you think about it there is little likelihood of that happening since it is basically a cheap way to get passengers on their ships where they will spend much more than the OBC that they got. Whether or not the stock price will rise or fall is subject to debate. In the past few weeks it has dropped dramatically but in the past few days it has begun to recover, again in rather dramatic fashion. However, many of us did not buy the stock because of its value as an investment but as a means of obtaining a financial reward on a line that we cruise with some frequency. Life almost always involves risk, and IMHO, the risk involved in purchasing and holding 100 shares of RCI is a minor one.

A report from a recent gathering of financial advisors who were discussing the future of the cruise industry in light of current recessionary trends, was quite optimistic. They reported that, contrary to some popular opinion, cruises are not among the first things to be sacrificed when people fall upon hard times. Cruises are still considered a bargain compared to many other vacation options, and even when things are bad, people believe that they deserve a vacation, and will find a way to do it, regardless of their circumstances.:)

[tuggers]

OK, would it be a bad thing to have gotten in the other day at 32.70 and out today at 38.75 with enough profit for a couple of cruises??? $$$$$$!! YEA!!:D

[FinelyCruising]

After short term capital gains???? Ouch.

[Gonzo70]

After short term capital gains???? Ouch.

 

Paying short term gains is a good thing - it means you made money! I am always happy to pay short term gains.

[Gonzo70]

Of course it can be terminated at any time, but if you think about it there is little likelihood of that happening since it is basically a cheap way to get passengers on their ships where they will spend much more than the OBC that they got.

 

I understand what you are saying and you may be right, but another way to look at is: If they ceased the OBC benefit (and I am by no means saying they will or should), would this cause their shareholders to stop cruising with them? If not, then they save money by ceasing the benefit. I for one enjoy the OBC as an "extra perk" but do not cruise because of the OBC; if the perk were taken away I would still cruise as frequently with RCL.

[Dr_DNA]

If one buys RCL stock, there is no reason why you have to hold onto it, right? I think that the rules require that you own the stock during your cruise. To the best of my knowledge, there is nothing to keep one from purchasing the stock just before the cruise, get the onboard credit, and selling it soon afterwards. Is my logic flawed on this?

[Gonzo70]

Hey, knock it off! You are thinking like an investor who cruises, not a cruiser who invests. :)

 

As I said, I took a look-see at RCL as an investment.

 

Did I buy? NO!

 

I am an investor who enjoys an occasional cruise, and I am guessing you are, too. I don't see that the benefits outway the possible downside. That's why I still prefer other companies and managers.

 

Now, if RCL were to go TOTALLY smokefree, I would HAVE to invest in the company, since I would put my money where my mouth is, and that would be as important to me as the money invested. Maybe moreso.

 

Well spoken; I was able to buy when it approahced its 52 week low. I would like to sell now, but will hold until at least after my cruise as I want to be ethical and not merely take advantage of the shareholder benefit. I am tempted to sell here and buy back in a week or two as I think a dip is far more likely then it continuing to climb in the short term.

 

I don't think RCL is ready to go smoke free quite yet, but it is nice to see the general trend towards greater restrictions on smoking. Hopefully the pace of this will pick up as the cruise industry is lagging behind the rest of the world on this issue. As much as I dislike smoking though, I don't think it would help the stock price if they went 100% smoke free this year.

[Host Walt]

After short term capital gains???? Ouch.

What are gains? You should see my capital loss carry forwards!!! :eek:

 

(I bought and held a bunch of stock in CCL, P&O fdr's, RCL and SHIP. What's SHIP you ask? That's the ticker symbol for Regency Cruises; the only cruise line stock I no longer have. Bankrupt. I still hold the others.)

 

As a practical matter, the leisure travel market is volatile as are the stock prices. But as long as RCL and CCL/P&O keep market share and have the capital resources to build new ships and keep growing, it's a good long term hold...and the OBC's for CCL and RCL are nice bonuses. The only other shareholder benefits I've had in other stocks are a cents off coupon for Reynolds Wrap (Alcoa) and an opportunity to buy a special "gift pack" of Kleenex products at regular retail (Kimberly Clark), so these two cruise line companies (CCL/P&O and RCL) are offering a spectacular shareholder benefit that should be considered in making a sell or hold decision.

[gillianrose]

The only other shareholder benefits I've had in other stocks are a cents off coupon for Reynolds Wrap (Alcoa) and an opportunity to buy a special "gift pack" of Kleenex products at regular retail (Kimberly Clark), so these two cruise line companies (CCL/P&O and RCL) are offering a spectacular shareholder benefit that should be considered in making a sell or hold decision.

 

Very funny post, Walt. :D

 

So, does Disney not offer shareholder benefits? I haven't sailed them before, but I wouldn't mind a nice pair of mouse ears.

 

Actually, when I first started investing, I recall that a lot of people were buying ONE share of Disney, supposedly because the share certificates are or were so cute, and then framing them and giving them to their grandchildren.

 

Do you know if that is (still) the case?

[Gonzo70]

Very funny post, Walt. :D

 

So, does Disney not offer shareholder benefits? I haven't sailed them before, but I wouldn't mind a nice pair of mouse ears.

 

Actually, when I first started investing, I recall that a lot of people were buying ONE share of Disney, supposedly because the share certificates are or were so cute, and then framing them and giving them to their grandchildren.

 

Do you know if that is (still) the case?

 

Dunno about Disney, but people often buy one share of Wrigley (WWY) as at Xmas time they send all their shareholders a case of gum.

 

Back when I held Starbucks (SBUX) they sent a voucher good for two free coffees with their annual report. The Royal Caribbean and Carnival perks are definitely much better than the WWY and SBUX perks.

[FinelyCruising]

Yes, we have had the Kimberly Clark happy pack :)

 

I think Unilever may had had a similar program at one time. Now that was a great box of stuff!!!

 

Gonzo, more money can be made with the Long Terms gains as well;)

 

Gillianrose, I saw those certificates bordered with colorful characters, they were quite nice. I had stock at one time in Worlds of Wonder, and they had a nice cert too.

 

These days it's like playing Monopoly, feeling like you have just had a bad roll or landed on a space that forces you to take what turns out to be one of those unfavorable orange or yellow cards.

[negc]

If one buys RCL stock, there is no reason why you have to hold onto it, right? I think that the rules require that you own the stock during your cruise. To the best of my knowledge, there is nothing to keep one from purchasing the stock just before the cruise, get the onboard credit, and selling it soon afterwards. Is my logic flawed on this?

 

The biggest flaw in your argument is that you will pay a fee when you purchase the stock and another fee when you sell it. When you decide to sell the stock the price might well be lower than it was when you bought it. As a result you will, at the very least, reduce the value of the OBC and you could actuall end up losing more money than you gained from the OBC. If you are going to purchase the stock and expect to cruise with RCI or Celebrity more than once, you are probably better off holding onto it for a while.