In this piece, we will take a look at the ten best cruise stocks to buy now. For more cruise stocks, head on over to 5 Best Cruise Stocks To Buy Now.
One of the hardest hit sectors by the coronavirus pandemic was the cruise ship industry. While other hospitality sectors, such as hotels and restaurants had time to prepare to deal with lockdown requirements aimed to curb the spread of the virus, cruise companies were simply caught off guard. This is due to the fact that as lockdowns started to be enforced, many cruise ships were in the middle of their journeys, and were often left stranded at sea due to port and harbor closures. In fact, a little known fact about the pandemic is that one of the most widespread coronavirus outbreaks after China in fact took place on a cruise ship. This ship was the Diamond Princess which has more than a thousand guest cabins and roughly the same number of crews.
The ill fated vessel began its journey in late January and saw its passenger and crew count swell to almost four thousand people. All of these were left stranded at the Tokyo harbor in Japan for almost a month after initial reports surfaced that two elderly passengers that had gotten off the ship in Hong Kong had tested positive for the deadly virus. Matters took a serious turn when ten passengers on board the Diamond Princess tested positive and the ship remained in limbo stuck at Tokyo for 27 days, with 14 passengers dying and 712 becoming infected.
However, the Diamond Princess was not the only ship stuck due to the virus. According to a Guardian investigation, more than one hundred thousand cruise ship crew members were left stranded at sea due to the virus, and many of them would die in the waters as well. In terms of economic costs, research from Russian maritime universities show that they are simply unbelievable. The researchers point out that between the third quarter of 2019 and the end of the first quarter of 2020, cruise companies saw their profits drop from $30 billion to just $50 million, for an almost complete decimation. The pandemic also put several companies out of business, as the total number of cruise companies dropped from 93 to 81 as the virus wreaked havoc all over the world.
The pandemic also shook the perception of the cruise liner industry. A natural language processing (NLP) analysis of the tweets related to the industry conducted by researchers in Spain showed that the majority of sentiment surrounding the industry was negative. The analysis revealed that widespread media coverage of the pandemic combined with previously held beliefs about the cruise industry as being a ‘petri dish’ for diseases contributed significantly to negative sentiment, and it cautioned that this sentiment can continue even as the pandemic settles and life goes back to normal. Since this raises the question of whether people would be willing to take a cruise after the devastation of the coronavirus pandemic, brief research reveals that researchers from the U.K. and Australia try to answer these very questions. By using a questionnaire through a research panel, they determined that risk perceptions related to cruise traveling were based on the participants’ home country, with respondents from Australia having a more negative outlook when compared to those from the U.K. It also found out that the coronavirus pandemic was unique in the sense that it led to an experience agnostic perception about the future intention to take a cruise, which was in opposition to previous viruses that had seen people with previous cruise ship experiences having more positive intentions.
With the worst behind it, a research report from Grand View Market Research estimates that the global cruise market was worth $7.25 billion in 2021 and that it grew to $7.67 billion in 2022. It adds that from 2022 onwards, it will grow at a compounded annual growth rate (CAGR) of 11% from 2022 to 2028 to sit at $15 billion by the end of the forecast period. The research firm adds that within the market, the river cruise segment will be the fastest growing and that it will outpace the broader industry by growing at 13.3%. According to Grand View Market Research, the ocean cruise segment was the largest segment in the market in 2021, as it accounted for 80% of the total revenues.
After the coronavirus bloodbath, the industry is well on its way to recovery, with the chief executive officer of Royal Caribbean Cruises Ltd. (NYSE:RCL), Mr. Jason Liberty, outlining during a recent earnings call in February 2023:
We finished 2022 on a high note and are entering 2023 with the full strength of our operating and commercial platforms. Our strong book position along with the normalization of the booking window provides the visibility needed for us to resume annual guidance, which is in line with our Trifecta program. I am incredibly thankful and proud of everyone at the Royal Caribbean Group for executing so well on our mission of delivering the best vacation experiences responsibly and building the foundation for our future growth. There has been a lot of talk about the state of the consumer, so I want to share what we are seeing from daily interactions with consumers who are either booking their dream vacations or who are currently sailing on one of our amazing ships.
Overall, we continue to see robust demand, financially healthy, highly engaged consumers that are excited to sail on our brands. Secular tailwinds continue to benefit us as consumer preferences shift from goods to experiences. Entertainment and travel spend remains strong and the job market continues to show resilience. Consumer sentiment has improved and banks have recently reported healthy savings and continued resilience in credit card spending. Our addressable market is larger than in 2019 and continues to grow. Our products appeal to a broad range of vacationers with everything from a short getaway to Perfect Day to a luxury world cruise. Cruising remains an exceptionally attractive value proposition. And as I have said in the past, it is too attractive, and we are working very hard every day to close that gap.
Today, we will take a look at some top cruise stocks, with the notable picks being The Walt Disney Company (NYSE:DIS), Royal Caribbean Cruises Ltd. (NYSE:RCL), and Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH).
Our Methodology
We took a look at Insider Monkey’s database of 943 hedge funds for last year’s fourth quarter to sift out their top cruise stock picks. Care has been taken to ensure that the companies listed are either directly involved in providing cruises or related services.
10 Best Cruise Stocks To Buy Now
10. Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND)
Number of Hedge Fund Investors In Q4 2022: 12
Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) is an American company that is headquartered in New York, New York. The firm provides ship expeditions and other services which also include land expeditions to hundreds of locations all over the world.
By the end of last year’s fourth quarter, 12 of the 943 hedge funds polled by Insider Monkey had bought Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND)’s shares.
Along with Royal Caribbean Cruises Ltd. (NYSE:RCL), The Walt Disney Company (NYSE:DIS), and Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH), Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) is one of the best cruise company stocks.
9. World Fuel Services Corporation (NYSE:INT)
Number of Hedge Fund Investors In Q4 2022: 14
World Fuel Services Corporation (NYSE:INT) is a maritime fueling company that is at the heart of the cruise ship industry. It is responsible for providing fuel to some of the largest cruise ship operators in the world. The firm is based in Miami, Florida.
14 of the 943 hedge funds part of Insider Monkey’s Q4 2022 survey had invested in the firm’s shares. World Fuel Services Corporation (NYSE:INT)’s largest hedge fund investor is Ali Motamed’s Invenomic Capital Management which owns 576,770 shares that are worth $15.7 million.
8. Carnival Corporation & plc (NYSE:CUK)
Number of Hedge Fund Investors In Q4 2022: 15
Carnival Corporation & plc (NYSE:CUK) is an American firm that is headquartered in Miami, Florida. The firm has almost 100 ships in its fleet of cruise vessels, as well as a portfolio of hospitality properties and railcars. The firm has an operation in the U.K., Australia, and other countries. The firm is one of the top cruise ship companies in the world simply due to its vast portfolio.
Insider Monkey’s fourth quarter of 2022 survey that covered 943 hedge funds revealed that 15 had bought a stake in Carnival Corporation & plc (NYSE:CUK)The firm’s largest investor in our database is Robert Henry Lynch’s Aristeia Capital which owns 11.2 million shares that are worth $81 million.
7. OneSpaWorld Holdings Limited (NASDAQ:OSW)
Number of Hedge Fund Investors In Q4 2022: 16
OneSpaWorld Holdings Limited (NASDAQ:OSW) focuses on providing services on cruise ships. As the name suggests, it provides spas on board ships, and its spas at sea include celebrity cruises, Oceania cruises, and Amazon cruises. The firm is headquartered in Coral Gables, Florida.
As of last year’s fourth quarter, 16 of the 943 hedge funds part of Insider Monkey’s study had bought the company’s shares. Out of these, John W. Rogers’ Ariel Investments is OneSpaWorld Holdings Limited (NASDAQ:OSW)’s largest shareholder. It owns 16 million shares that are worth $149 million.
6. Agilysys, Inc. (NASDAQ:AGYS)
Number of Hedge Fund Investors In Q4 2022: 19
Agilysys, Inc. (NASDAQ:AGYS) is a hardware and software company headquartered in Alpharetta, Georgia. The firm provides cruise ship software that allows operators to operate remote check ins, digital dinner reservations, and geolocated ordering.
19 of the 943 hedge funds polled by Insider Monkey had invested in Agilysys, Inc. (NASDAQ:AGYS) during Q4 2022. The company’s largest hedge fund shareholder is Michael Kaufman’s MAK Capital One which owns 3.7 million shares that are worth $300 million.
The Walt Disney Company (NYSE:DIS), Agilysys, Inc. (NASDAQ:AGYS), Royal Caribbean Cruises Ltd. (NYSE:RCL), and Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) are some of the best cruise stocks that hedge funds are piling into.
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Disclosure: None. 10 Best Cruise Stocks To Buy Now is originally published on Insider Monkey.
