RCL Stocks Take Dive

[hermang]

Assuming you have a paper loss -why sell and make it a real loss.

 

RCCl has been as high as $42 and it will be back there one of these days.

 

Look at the market - almost 2 trillion ( uh how many zeroes is that) downin a matter of days - INCLUDING well managed companies.

 

Now if you say AIG or some of the other Bank/Insurance companies - Thats another story

 

can you imagine the Gall - they just asked for more billions and their execs spent $443,000 on a corporate outing. I say make em walk the plank, Fire the SOB's, Take away their pensions and send em to Jail.

 

Me - I am not selling anything

[Gonzo70]

Assuming you have a paper loss -why sell and make it a real loss.

 

RCCl has been as high as $42 and it will be back there one of these days.

 

 

 

Really? I think the stock is much more likely to go to zero than back to $42 in the next few years. Although I would not sell here (too much of a drop too quick) I would sell into a bounce. Taking a real loss (as you put it) is often the prudent thing to do. If there is somewhere better to put your money, do it and don't be concerned if you are taking a loss, gain, or breaking even.

[4Adam13]

Maybe I'm confused. But why would anyone be shocked in today's market that cruiseline stock would drop like a brick? Read the business papers if you don't listen to news and you'll see resorts, hotels, airlines....anything vacation orientated is biting the dust big time. Why would that surprise anyone? Now add to it the cruiselines just went thru a building spree with loans galore and what would you expect? Hang on to your stock and look at it in 5-10 years. If all you need to worry about is your X/RCL stock, wouldn't you consider yourself lucky?

 

Completely agree.

 

Unless you are well versed in economics and have studied RCL's Corporate Annual Report, I don't know how someone could say they are mismanaged. Just because the stock is down? Berkshire Hathaway is down almost 5%, which is over $6000. I guess Warren Buffet doesn't know how to manage his company.....so much for being the innovator of investors.

 

If you think they are mismanaged, have you looked checked out their P/E ratio and compared it to the industry average? How about their debt to asset ratio? Debt to equity? or acid test ratio?

 

My point is that sometimes because we are emotionally involved with a person, company, product, situation, etc, we don't necessarily look at things objectively.

 

If you look at above ratios in comparison to the industry average, RCL is stable. It is not what would make up the largest portion of my portfolio, but as an avid cruiser, it is worth it to pick up for the OBC's and dividends. By the time I pass it over to my children, it will have paid for itself.

 

It is a good company. Not great, but good and stable.

[Lsimon]

...The last time I looked, it wasn't worth it to purchase stock. Has this changed?

 

Nothings changed. Generally I think it doesn't make sense for most people to buy stock just for the credit. I said that when the stock was at $40 and when it was at $30. The stock should be purchased by people as part of an investment plan. And if you're not sure if it is a good buy or not then you should be talking to a qualified investment advisor (which I am not).

 

If you buy 100 shares today at $15 it will cost you $1,500 to save $200, give or take a little. Now if you can afford to lose part of that $1,500 and want to own a piece of the company then that is fine. But if all you are interested in is the $200 savings that is foolish. There are lots of people that thought it couldn't go lower when it fell to $30 last summer. They're now $1,500 in the hole. So, don't believe it can't go lower than $15.

 

Personally, I think the stock as fallen primarily because of the general market conditions and also because many investors fear that the travel industry will likely have some hard times before the troubled economy improves - making it possible that travel related companies might do poorly in the near term. On the other hand I personally think the stock represents a decent value. At the same time I wouldn't buy any stock now as I believe the market is way to volatile and uncertain. But again, I am not an investment advisor nor an expert and for every seller there is a buyer.

[Bobblsc]

If you believe the U. S. economy will recover from its current and near term problems within a year or two, why would you not believe the the leisure travel and cruise industry will return to its recent health?

 

We may well go into a recession, but the chances of a terrible 1930's type depression are remote. We have not so far had even one quarter of negative "growth" of GDP. By definition, it takes two consecutive quarters of negative growth of GDP to be termed a recession. People can yell and scream that we are already in a recession, but this is not so. There were sharp economic minds who defined "recession." The two quarters were put in the definition so people would not holler "recession" at each economic downturn blip.

 

Part of our future problems will probably be due to other economies. The U. S. sneezed and the rest of the world caught cold. I believe it is universally recognized that the major cause of our current bank and economic problems stems from the downturn in the housing market, and the Fanny Mae and Freddy Mac were major contributors to that downturn. I would like to, but I cannot discuss this any further.

 

I believe that within a year, at the most two, most of or all of the current major economic problems will be resolved.

 

If this is so, RCL and CCL will recover to current or better economic heath. Both RCL and CCL are currently with depressed stock prices. RCL's P/E is now at 5.4 for past earnings. If earnings go to one-half the P/E would still be 10.8 at the current stock price. Of course earnings could go to zero or less.

 

OK, it is late, but I would think that if you can take some risk without jeopardizing you lifestyle, the purchase of 100 shares of RCL and the receipt of OBC's would be a good move.

 

I too have some doubts about RCL management, but they probably do decent job in most areas. They have apparently saved by purchasing fuel futures, while my understanding is that CCL has not. I do wonder about their decision to eliminate some OBC's when combined with stock holder credits. I also wonder why Celebrity allows two bottles of wine brought on board, while Royal Caribbean allows none.

 

Someone in their management seems to focus on short term profits without consideration of long term results. I believe this is harmful to their economic heath.

 

Bob :cool:

[lisiamc]

If you buy 100 shares today at $15 it will cost you $1,500 to save $200, give or take a little. Now if you can afford to lose part of that $1,500 and want to own a piece of the company then that is fine. But if all you are interested in is the $200 savings that is foolish.

 

That's true if you only cruise once, but if you cruise often, it won't take you long to recoup your $1500. It's taken me a few more cruises, since I bought when it was higher. After that, further credits and dividends are gravy. As long as they don't go out of business, which I don't think they will (hope not anyway!), I'm ahead of the game.

 

Lisa

[biker1972]

Be aware that the stockholders benefit is not cut in stone. While it has been around for a number of years, it might not be renewed. I think that it is an annual decision. Again, the purchase of any stock should be a part of a well thought out program as Lsimon says,

[4Adam13]

Be aware that the stockholders benefit is not cut in stone. While it has been around for a number of years, it might not be renewed. I think that it is an annual decision. Again, the purchase of any stock should be a part of a well thought out program as Lsimon says,

 

Agreed, if you are going to purchase a significant amount of shares. 100 shares at $15, $20, $25, or even $30 isn't considered significant in the investment world. It's small potatoes. I know for some people $3000 is a lot of money, and it is....completely agree. But truly in the grand scheme of retirement accounts, it is not.....if you are investing correctly.

 

Most people buying only 100 shares aren't doing so with the idea that it will be a significant contribution to their retirement. They are buying them for the OBC's and to a lot lesser extent, the dividends.

 

So while I agree that any investment decision should be based in accordance with your portfolio plan, 100 shares of RCL is just isn't significant enough.

[starlake]

Did you all see that the stock dividend will not be allowed to combine with other discounts such as on board credit after Oct. 16? There are pages of this over on the RC board.

[bobbyleduck]

We may well go into a recession, but the chances of a terrible 1930's type depression are remote. We have not so far had even one quarter of negative "growth" of GDP. By definition, it takes two consecutive quarters of negative growth of GDP to be termed a recession. People can yell and scream that we are already in a recession, but this is not so. There were sharp economic minds who defined "recession." The two quarters were put in the definition so people would not holler "recession" at each economic downturn blip.

 

Bob :cool:

 

I'm sorry, but your definition of recession is seriously outdated. No reasonable person uses that definition anymore. Wikipedia gives a much more accurate definition of the recession that actually started last December. Don't worry, though, because historians will eventually describe the period we're currently experiencing as a depression (but not necessarily a Great Depression), when all is said and done.

 

Wikipedia:

A recession is a contraction phase of the business cycle. The U.S. based National Bureau of Economic Research (NBER) defines a recession more broadly as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."[1] A sustained recession may become a depression.

As for RCL stock. I suggested on these boards, just a few months ago, that the stock would bottom out at closer to $10 than to $20, and that was when it was just below $20. Most people tended to attack and flame my position about the travel and leisure industry getting hammered, but now it seems to have become common knowledge.

 

Hmm! It's interesting that those of us who are prescient enough (really it's just a matter of paying attention), to accurately see what's going to happen get toasted until the event actually takes place.

 

Happy cruising to all!

 

Bob

 

P.S. Bob: I do believe that much of what you say is accurate, but not with regard to a recession.

[richsea]

And we all know that facts posted on Wikipedia are cast in stone!

 

It must be true, I read it on the internet!!

[bobbyleduck]

And we all know that facts posted on Wikipedia are cast in stone!

 

It must be true, I read it on the internet!!

 

OK, Rich! I just used that one because it seems to be agreed upon by most economists, at least those who've been at it since the early 1980s. How about the following:

 

Webster's New Universal Unabridged Dictionary - Copyright 1983:

 

"In economics: a temporary falling off of business activity during a period when such activity has been generally increasing."

 

It doesn't much matter what you call it, but a bear market for exactly one year, a decline in employment for more than nine months, an eight year period where real wages, for ordinary people, have decreased, a housing market in the tank, oil and gasoline prices that have reached all-time highs, and a general increase in the cost of living that we haven't seen since the late 70s and early 80s, seems to have all of the earmarks of a recession. If it continues until this time in 2010, then it will be a depression.

 

But, as I said, it doesn't much matter what you call it. The travel and leisure industry has been hit hard, and it got to the party a little late. As long as the industry stays solvent, it won't matter to people who have unlimited resources and get to just ride out this downturn. For all of them, the ships will not be quite as full, the resorts won't be bustling quite as much, and their favorite restaurants won't make them wait as long for a table, but hey, they have plenty of money so what does it matter if others are suffering.

 

Happy cruising to all!

 

Bob

[excitedofharpenden]

As for RCL stock. I suggested on these boards, just a few months ago, that the stock would bottom out at closer to $10 than to $20, and that was when it was just below $20. Most people tended to attack and flame my position about the travel and leisure industry getting hammered, but now it seems to have become common knowledge.

 

Hmm! It's interesting that those of us who are prescient enough (really it's just a matter of paying attention), to accurately see what's going to happen get toasted until the event actually takes place.

 

It didn't bottom out at closer to $10 though, did it? In fact it went back up above $29. We are now in the midst of a crisis that few of us would have believed could have gone this far, prescient or not and all shares not just RCCL are taking a hammering. Me thinks you pat yourself on the back too readily.

 

Phil

[Tinwoman]

The company doesn't care about you, we can't afford to be loyal to any cruise line.

Just find the best cruise possible for the buck, and don't limit yourselves to any one company.

Seriously do you really think they care about us?

[bobbyleduck]

It didn't bottom out at closer to $10 though, did it? In fact it went back up above $29. We are now in the midst of a crisis that few of us would have believed could have gone this far, prescient or not and all shares not just RCCL are taking a hammering. Me thinks you pat yourself on the back too readily.

 

Phil

 

Ah! But, Phil, RCL closed today, at $14.76 (low of $14.39), which is closer to $10 than to $20, and the pain may not yet be finished. That prediction was in early July, so I don't think that a few months was too long to wait considering what went on to get us here. You correctly tell us that during a brief upswing, after various market manipulating events by the Federal Reserve, and Treasury Department, that RCL rose above $29, but that was the sort of manipulation that has gone on since August 2007, in a failed attempt to forestall reality.

 

During that time, the DOW hit a record (last October 9th), but if it weren't for the market manipulations last year, in the spring of this year, the stimulus package, and more market manipulation in July, then there is a good chance that the recession we're experiencing would be just about winding down. Instead, well, I don't have to tell any of you just where instead has lead us.

 

Does anyone actually know what the more than 1 trillion dollars in market manipulations, not to mention the more than 1 trillion dollars additional that the past week has cost us, will eventually set us back? Nor do I, but I can tell you that we'll be paying for it in reduced services for the next 50 years. Either that, or with increased taxes, which will reduce our ability to cruise or avail ourselves of any other travel and leisure product.

 

Happy cruising to all!

 

Bob

 

P.S. It didn't take an economic giant to see where all of the market manipulation was leading us. I just read the warning signs, and wasn't willing to let people tell me that the garbage that was going on meant that the economy was "strong."

[FinelyCruising]

Unless you are well versed in economics and have studied RCL's Corporate Annual Report, I don't know how someone could say they are mismanaged. Just because the stock is down? Berkshire Hathaway is down almost 5%, which is over $6000. I guess Warren Buffet doesn't know how to manage his company.....so much for being the innovator of investors.

 

 

 

Economics has nothing to do with service levels. (Unless all the greed for investors returns has been tilted expense of the cruise guest and services.) RCL is a service organization and I'm pretty sure that in the long run, the focus has to go back to those simple basics.

 

It sure is not doing well right now because of economics and one fine day may come that allows people to enjoy spending again. Then, it's going to be about services since all the pricing will be similar.

 

If they were smart they'd be on this right now as the bridge to tomorrow, but they fail to hold on to both tangible and intangables and this board is a good enough barometer to hear the failings.

 

I am in a service business. Part of what we do is capture share. We adjust prices accordingly and if we can't break even we decide potentially not to move forward. If we have to take a loss, we decide if it enhances market share. In either scenario, which is not about profit do we reduce our service levels with any tone of you pay less you get less, the economy stinks, we reduce our overall efforts and your expectations.

 

Out stock is tanking big time and we don't own a thing, we provide service, and in our region we have not lost one client. Not one. The show must go on.

[excitedofharpenden]

 

During that time, the DOW hit a record (last October 9th), but if it weren't for the market manipulations last year, in the spring of this year, the stimulus package, and more market manipulation in July, then there is a good chance that the recession we're experiencing would be just about winding down. Instead, well, I don't have to tell any of you just where instead has lead us.

I happen to disagree with that, but I'm not going to argue with you Bob. This is not the place to do it and as a financial educator you must know an awful lot more than I do:rolleyes:. However, the "I told you so" attitude is just getting a little tiring.

 

Phil

[Longboysfan]

I happen to disagree with that, but I'm not going to argue with you Bob. This is not the place to do it and as a financial educator you must know an awful lot more than I do:rolleyes:. However, the "I told you so" attitude is just getting a little tiring.

 

Phil

 

Hey. Phil - how are stocks doing on the London exchange?

It would be refreshing to see a British take on all of this and what you think.

[zuggie]

It's interesting to take a look at how Carnival Corp. has fared this last year compared to RCL Corp.

 

Carnival's stock has dropped from $51 to $27 during the past 12 months, less than a 50% drop. RCL has declined from $42 to under $14 during the same period. About a 66% drop.

 

Carnival's PE as of this morning is 9.74. RCL's PE is 5.05.

 

What this is telling us is that the market values Carnival's quality of earnings much more than RCL's. In other words, when times get tough, RCL's earnings will go down the tubes much faster than Carnival's.

 

This has to be a reflection to some degree as to how the two companies are managed. For one thing, I believe that RCL is highly leveraged, much more than Canival. In other words, RCL is heavily in debt and owe a bunch of money.

 

So how does this affect us? Well, if things really, really get worse and the cruise business tanks, and there's not enough business for both cruise lines, it will be RCL that will probably go under, just because their financials are weaker. I'm not saying this is going to happen, but whoever thought we would see in the economy and the stock market what we've been seeing this past month.

 

We have a cruise booked on the Summit in January, and we'll stick with that. But we also have a Med cruise lined up on Solstice in September with a $900. deposit. We're thinking of cancelling the Solstice and getting our $900. back. Then, this summer, depending on how this economic situation shakes out and how prosperous we're feeling after all this, perhaps rebook it at hopefully a lower price.

[excitedofharpenden]

Hey. Phil - how are stocks doing on the London exchange?

It would be refreshing to see a British take on all of this and what you think.

How long have you got?;) It's as bad here as anywhere else at the moment and many people and corporations (local government and charities too) have been hit by the crisis in Iceland for example and the fact that it's gone bust as a nation. When you start fearing for your safety as a depositor as well as an investor then it brings things to a new level in my view and one which I never thought I'd see. My local council had over $30 million invested in Iceland which they most likely won't get back and there is only one way to pay for that or cut back on services. That's before you even talk about the capital assistance the government here are giving the banks (I understand there are calls for the US to act in a similar way). Trouble is this time the banks are central to the failures in the market and it filters through to everything and everyone.

 

Sadly all of this will feed into the economy along with what is out there already. Crisis of confidence on a huge scale. I keep waiting for that bounce and for people to start picking up the cheap scraps, but not many have the nerve at present. I could go on, but it's not for here. Well, you did ask:o

 

Phil

[Oceans&Rivers]

Assuming you have a paper loss -why sell and make it a real loss.

 

RCCl has been as high as $42 and it will be back there one of these days.

 

Look at the market - almost 2 trillion ( uh how many zeroes is that) downin a matter of days - INCLUDING well managed companies.

 

Yes, it's nearly all down, including BRK, my favorite company/stock, run by my favorite investor, Warren Buffet. Does that mean that Berkshire-Hathaway is mis-managed? :rolleyes:

 

People are panicking and selling at historical lows. I agree that it is painful to look at, and worse for Boomers and older, since we have less time to make up losses. Nevertheless, I'm watching the market closely and buying, not selling.

 

Royal Caribbean stock is RCL, not RCI, and if you are a frequent cruiser on any RCL-stock line (Azamara, Celebrity, and Royal Caribbean), you might want to look at whether the OBC (onboard credit) will pay for the stock you purchase.

 

On a 15-minute time delay, the stock is $13.02 right now.

[Gonzo70]

Royal Caribbean stock is RCL, not RCI, and if you are a frequent cruiser on any RCL-stock line (Azamara, Celebrity, and Royal Caribbean), you might want to look at whether the OBC (onboard credit) will pay for the stock you purchase.

 

On a 15-minute time delay, the stock is $13.02 right now.

 

I would not be too confident they are going to continue the Shareholder OBC at this point. I certainly would not purchase the stock for the OBC at this point. With the stock price down so much, it would not be at all shocking if they annunce in the near future that they will no longer accept Shareholder OBC requests.

[houstontx]

It's interesting to take a look at how Carnival Corp. has fared this last year compared to RCL Corp.

 

Carnival's stock has dropped from $51 to $27 during the past 12 months, less than a 50% drop. RCL has declined from $42 to under $14 during the same period. About a 66% drop.

 

For one thing, I believe that RCL is highly leveraged, much more than Canival. In other words, RCL is heavily in debt and owe a bunch of money.

This statement refers to debt / credit. I think this is exactly why RCI has been hit harder than Carnival.

 

But I hope people do not jump on the "panic bandwagon" and start canceling their cruises to get the deposits back and such. It's the "panic in the marketplace" that's driving the prices on Wall Street right, IMO.

 

Alan (& Regina)

[AAAAmerican]

The Week weak close of RCL :NYSE is

 

 

Last

14.00

 

Change

-0.76

 

Bid

13.22

 

Ask

14.79

 

High

15.42

 

Low

12.72

 

Vol

12,432,345

 

Time

16:03:40

 

 

 

 

[AAAAmerican]

 

CCL :NYSE

+0.10

 

Bid

27.30

 

Ask

31.19

 

High

28.94

 

Low

24.08

 

Vol

21,079,450

 

Time

16:00:33