RCL Stock

[hubofhockey]

On 6/14/2020 at 8:19 AM, LXA350 said:

 

I don't think we will see the stock go back below 30 or even down to levels in March unless a big time 2nd wave will hit us to an extent that the current halt to cruising will need to be extended or shortly after restarting cruising will be discontinued again without persectives when it can resume again. Otherwise for the time being we will see some further fluctuations in the share, great for day traders but I doubt under normal cirucmstances that we will see it drop below the upper 30's.

 

Nevertheless the markets are unpredictable and currently do anyway not reflect the real picture of the economy.

 

Nobody knows how far the cruise stocks will fall, but you need a strong stomach to hold it at the current price of 57.  If they announce that all cruises are cancelled through 2020, it will head down fast.

[Dennis#1]

22 minutes ago, hubofhockey said:

 

Nobody knows how far the cruise stocks will fall, but you need a strong stomach to hold it at the current price of 57.  If they announce that all cruises are cancelled through 2020, it will head down fast.

Agree.  Surprised that RCL stock closed today at $62.50.

[PatMunits]

RCL is a sell at current levels because:

- suspended all dividend payments until fresh billions of debt at over 10% are repaid

- Pullmantur Joint Venture is essentially going concern with ships going into cold storage and listed for sale

- social distancing will be the new norm until the time when most travelers are vaccinated to nullify effects of future rare onboard Covid instances. This drastically decreases potential revenue per ship.

- consumers will be out of funds by November the earliest when it will become reasonable again for RCL to advertise for new business

- RCL will have significant problems hiring back qualified and experienced personal. The immediate effect of this is going to be reflected in lower quality and level of service that cruisers will experience onboard. Brand quality will suffer, and will take a number of seasons to recover. This in effect will lead to lower new sales growth compared to pre-Covid times.

- RCL is absolutely in no condition to go on a lucrative acquisition spree

- company will dilute shares and will likely postpone reinstatement of dividends until 2024 or so

- RCL is more volatile than market average. When the party atmosphere at RobinHood blows up, RCL will pull back much more than the indexes

- current price has 100% assumption that generally-accepted Covid vaccination will come in full effect before company runs out of funds. The chances of vaccine being available are well over 50% but not 100%, or 90%. Current price doesn't reflect this.
- these are the times of full-blown travel industry depression but the stock is trading like the current situation is just a single blip on a radar
- the following future expenses have not been priced in all:

  -- renegotiation with dozens of separate port authorities to comply with future crazy health requirements that each individual port may come up with
  -- loss of a large part of the richest and most lucrative market segment who won't be able to sail again because they won't be able to obtain a satisfactory health insurance (senior people with funds to enjoy)
  -- no interest from young people to sail on Royal because competitors are more hip

  -- myriad of future class-action lawsuits related to major screw-ups related to FCCs, and the fact that RCL continues to sell cruises that it knows most likely will not happen because they will have to suspend operations of smaller and older ships

  -- reduced fleet count because older/smaller ships will be too unprofitable to operate when RCL is going to be showing net losses quarter after quarter for the next five years

I remain very bearish on the current valuation levels of RCL. To me this a $27 stock, and I'm looking to buy it around $22.

[Baron Barracuda]

Lengthy articles in WSJ and Barrons over the weekend on how Robinhood.com has become a refuge for sports gambling enthusiasts craving action with major sports shut down.  With an average age of 31 they  crowd into a beaten-down stocks buying and selling solely on the basis of momentum (whats going up will keep going up), forget fundamentals.  The produce enough trading volume to cause their stocks to swing wildly from day to day.  The 20 most popular stocks on the site include a number of troubled companies such as Hertz, Chesapeake Energy, GE, Ford and GoPro plus a few airlines and of course all 3 major cruise lines.   Reminds me of the dotcom days when hot stocks were valued on their click-throughs.

[Baron Barracuda]

1 hour ago, taglovestocruise said:

From JP Morgan today. 

Royal Caribbean (RCL)

To watch Montour’s track record, click here)

 

ok, I clicked and see TipRanks (whoever they are) has Montour ranked #1792 of the 6674 analysts they track and the success rate of his recommendations is 55%.  Not terrible, but certainly not top of class.  Note that his review makes no mention of when he expects sailing to resume.  Kind of an important data point when attempting to set a target price for the stock

[The_Big_M]

3 hours ago, Baron Barracuda said:

ok, I clicked and see TipRanks (whoever they are) has Montour ranked #1792 of the 6674 analysts they track and the success rate of his recommendations is 55%.  Not terrible, but certainly not top of class.  Note that his review makes no mention of when he expects sailing to resume.  Kind of an important data point when attempting to set a target price for the stock

 

That rating means he does marginally better than the market. That means if you follow him, over time, you should have a reasonable return across all investments.

 

However, that 55% rating also means on any single investment, the chance of him being right is barely more than tossing a coin. Therefore, not a lot of merit to attach great weight/insight to his assessment of a specific company.

[hubofhockey]

On 6/16/2020 at 6:37 PM, Baron Barracuda said:

Lengthy articles in WSJ and Barrons over the weekend on how Robinhood.com has become a refuge for sports gambling enthusiasts craving action with major sports shut down.  With an average age of 31 they  crowd into a beaten-down stocks buying and selling solely on the basis of momentum (whats going up will keep going up), forget fundamentals.  The produce enough trading volume to cause their stocks to swing wildly from day to day.  The 20 most popular stocks on the site include a number of troubled companies such as Hertz, Chesapeake Energy, GE, Ford and GoPro plus a few airlines and of course all 3 major cruise lines.   Reminds me of the dotcom days when hot stocks were valued on their click-throughs.

 

I have to admit that Robinhood has replaced FanDuel for me, but I just use it for entertainment purposes and the fun of buying and selling and trying to outguess the market. I have $300 in the "game", but my retirement is all in mutual funds managed by professionals with an appropriate stock/bond mix.   My RCL investment was in an IRA and I dumped it at 72.50 over a couple of weeks ago.  I do think it will get very low again and in the $40s next week.  

[Jimbo]

Pre trading hours rccl has already lost $1.27 for the day, look for it to go down into the 40's before the day is done.

[PatMunits]

On 6/16/2020 at 6:30 PM, PatMunits said:

RCL is a sell at current levels because:

- Pullmantur Joint Venture is essentially going concern with ships going into cold storage and listed for sale

I remain very bearish on the current valuation levels of RCL. To me this a $27 stock, and I'm looking to buy it around $22.

 

Pullmantur is bankrupt. https://www.nasdaq.com/articles/royal-caribbeans-spanish-joint-venture-declares-bankruptcy-2020-06-22

[mpk]

1 hour ago, PatMunits said:

 

Pullmantur is bankrupt. https://www.nasdaq.com/articles/royal-caribbeans-spanish-joint-venture-declares-bankruptcy-2020-06-22

 

Bankrupt with intention to reorganize.  Not bankrupt as in immediately out-of-business.

[PatMunits]

10 minutes ago, mpk said:

 

Bankrupt with intention to reorganize.  Not bankrupt as in immediately out-of-business.

Crews were busy stripping all valuables from the ships over the weekend. This was done in a secretive manner. The three Pullmantur ships will not cruise again under the same ownership (and likely never because they are inefficient boats).

The sum of a full immediate write off for RCL is more beneficial than a minute chance of potentially being able to operate ancient boats at mediocre margins sometime again in the future.

RCL likely sees it this way:
- realize immediate losses today
- bank inflated losses amounts to be used in the future to offset future profits in better years
- lessen immediate burden of trying to figure out how to deal with an obvious bad business
- perfect timing because Wall Street will ignore this JV loss write off set against all the other issues RCL deals with
- this being a minority stake for RCL means that someone else will have to deal with all the reorganization headaches
- loss of market demand means that RCL will not be actually losing any lucrative market share by exiting this low-margin cruising niche 

[A&L_Ont]

If you have stock I’d sell now.

[Milwaukee Eight]

1 hour ago, A&L_Ont said:

If you have stock I’d sell now.

I’m surprised it hasn’t tanked more than it has today. 

[Baron Barracuda]

1 hour ago, PatMunits said:

Crews were busy stripping all valuables from the ships over the weekend. This was done in a secretive manner. The three Pullmantur ships will not cruise again under the same ownership (and likely never because they are inefficient boats).

The sum of a full immediate write off for RCL is more beneficial than a minute chance of potentially being able to operate ancient boats at mediocre margins sometime again in the future.

RCL likely sees it this way:
- realize immediate losses today
- bank inflated losses amounts to be used in the future to offset future profits in better years
- lessen immediate burden of trying to figure out how to deal with an obvious bad business
- perfect timing because Wall Street will ignore this JV loss write off set against all the other issues RCL deals with
- this being a minority stake for RCL means that someone else will have to deal with all the reorganization headaches
- loss of market demand means that RCL will not be actually losing any lucrative market share by exiting this low-margin cruising niche 

Check your 8k, RCL wrote off their Pullmantur investment back in 1st qtr.

[hubofhockey]

8 minutes ago, Milwaukee Eight said:

I’m surprised it hasn’t tanked more than it has today. 

 

The stock is pretty volatile and maybe investors are hanging in there in the hope that the slightest sign of good news will bring this thing back up.  They'd be better off selling now and buying it back when it dips into the $30s.

[bigeck]

This on Market watch says buy

 

https://investorplace.com/2020/06/ride-out-the-choppy-seas-and-buy-royal-caribbean-rcl-stock/?mod=mw_quote_news

[hubofhockey]

That article fails to even mention the $billions in debt that RCL took on and the cashflow that will pay interest rather than dividends or that much of the debt is convertible in the low $70s.  How can this thing double in a year with all of those obstacles out there?  

[twangster]

Long term there is lots of upside potential if they can weather through many more months with no revenue.  

 

Ships won't sail for months yet, probably not this year.  There is some potential to ride the roller coaster.   Buy low, sell high, rinse, lather, repeat as it goes up and down for the foreseeable future.  The trick as always is knowing when to get off the ride and walk away.  

[bigeck]

6 minutes ago, hubofhockey said:

That article fails to even mention the $billions in debt that RCL took on and the cashflow that will pay interest rather than dividends or that much of the debt is convertible in the low $70s.  How can this thing double in a year with all of those obstacles out there?  

I'm sure cruising will get back to normal. A year is being optimistic to say the least, more like 5 years.

I won't sell, but if it drops again I might buy some more.

It will take as long as it takes to get back to over $100

 

 

 

Edited June 22, 2020 by bigeck

[twangster]

Looks like the second wave of RCL stock is happening.  Or maybe second trough is a better term.  Sell! Sell! Sell!  Wait for $20 then Buy! Buy! Buy!

 

Hmmm.  It's almost like RCL stock charts track COVID charts but upside down.  

 

Everyone enjoying the roller coaster ride?

Edited June 24, 2020 by twangster

[Dennis#1]

 

5 minutes ago, twangster said:

Looks like the second wave of RCL stock is happening.  Or maybe second trough is a better term.  Sell! Sell! Sell!  Wait for $20 then Buy! Buy! Buy!

 

Hmmm.  It's almost like RCL stock charts track COVID charts but upside down.  

 

Everyone enjoying the roller coaster ride?

You may be correct.  RCL shares currently at $48.11.

[John&LaLa]

1 hour ago, Dennis#1 said:

 

You may be correct.  RCL shares currently at $48.11.

 

I'm still up $6 😉

[molly361]

7 minutes ago, John&LaLa said:

 

I'm still up $6 😉

I'm waiting to buy back in

[John&LaLa]

3 minutes ago, molly361 said:

I'm waiting to buy back in

 

I intended to sell in the $70's, but i got caught up doing the OBC forms, and put it off to long

[CTCruiser76]

2 hours ago, John&LaLa said:

 

I intended to sell in the $70's, but i got caught up doing the OBC forms, and put it off to long

@John&LaLa that makes two of us.... 😞