In this article, we will be looking at the 10 best cruise stocks to buy now. To skip our detailed analysis of the leisure travel industry and its future outlook, you can click to see the 5 Best Cruise Stocks to Buy Now.
When travel restrictions were put in place because of the outbreak of the coronavirus pandemic, the travel industry as a whole took a huge hit, but more than any other sector, the cruise line sector may be the one that was impacted most at the time. According to the Carnival Corporation & plc’s (NYSE: CCL) 2020 annual report, while the global cruise line sector made a $3 billion profit in 2019, in 2020, it ended up with a $10 billion loss with its revenues plunging by 73%. This is unsurprising because the global community clamped down on all forms of travel because of COVID-19, and leisure travel ended up being the first to go for many. This had unprecedented effects on many aspects relating to the operation of the cruise industry, leading to a loss of over $77 billion in global economic activity, 518,000 jobs, and $23 billion in wages in 2019 alone, according to the Cruise Lines International Association’s 2021 State of the Cruise Industry Outlook.
Despite this, the cruise line sector has proven to be highly profitable for the global economy, reporting a contribution of over $154 billion in 2019, according to Cruise Lines International Association. While the coronavirus pandemic undoubtedly led to the sector suffering heavy losses, we can still expect it to bounce back in the coming years, particularly since with the administration of more COVID-19 vaccinations worldwide, travel restrictions and lockdowns are beginning to be eased again. According to Cruise Market Watch, the market share for the global cruise industry is estimated at $23.8 billion in 2021. This marks a rise of 81.8% from the market share of 2020, signaling growth and the industry’s potential to get back on its feet, but it is still representative of a 52.9% decline from 2019, meaning that the prospective growth, while present, is due to be slow.
Regardless, the industry’s growth cannot be denied, even though it is expected to be slow-paced. The growth itself is also being aided by governments worldwide, with the US government, for instance, having signed multiple COVID-19 relief bills in 2020 to help industries like the airline and cruise industries get back on their feet after getting hit by the pandemic. Early in 2020, about $8.3 billion was given away to aid industries that were struggling, according to CNBC. However, while this was helpful for US companies, major industry players like the Royal Caribbean Group (NYSE: RCL), Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH), and Carnival Corporation & plc (NYSE: CCL) that were incorporated in different countries were still left hanging.
Despite the above, these companies have managed to weather the storm and bounce back from the financial losses suffered since the pandemic broke out. For instance, Carnival Corporation & plc (NYSE: CCL) brought in $6 billion in April last year. This indicates the hope may not be lost for the cruise industry just yet, and so we have compiled a list of the best cruise stocks to buy now.
Investing is becoming difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Photo by Stephanie Klepacki on Unsplash
With this context and industry outlook in mind, let’s now take a look at the 10 best cruise stocks to buy now. We took into account hedge fund sentiment, fundamentals, future growth catalysts and analysts’ ratings while choosing these stocks.
Best Cruise Stocks to Buy Now
10. TUI AG (OTCMKTS: TUIFF)
Number of Hedge Fund Holders: N/A
TUI AG (OTCMKTS: TUIFF) is a tourism company operating worldwide and based in Hanover, Germany. The company operates resorts and hotels under the Robinson, Riu, TUI Blue, and other brands. It also has its own cruise liners and is ranked 10th on our list of the best cruise stocks to buy now.
For the fiscal first quarter of 2021, TUI AG (OTCMKTS: TUIFF) had $571.83 million in revenue. The stock has a market cap of $6.08 billion and has gained 6% in the past year. According to Winds Research, the company stands to benefit from a prospective boom in travel after the pandemic.
Like the Royal Caribbean Group (NYSE: RCL), Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH), and Carnival Corporation & plc (NYSE: CCL), this is a good cruise stock to invest in.
9. Genting Hong Kong Limited (OTCMKTS: GTHKF)
Number of Hedge Fund Holders: N/A
Genting Hong Kong Limited (OTCMKTS: GTHKF) is an investment holding company that operates passenger cruise ships in the US and internationally. The company has three segments: the Cruise and Cruise-Related Activities, Shipyard, and Non-Cruise Activities segments. It ranks 9th on our list of the best cruise stocks to buy now.
The company has a market cap of $666.37 million and $366.82 million in revenue, trailing three months. The stock has gained 89% in the past 6 months and 152% year to date. Like the Royal Caribbean Group (NYSE: RCL), Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH), and Carnival Corporation & plc (NYSE: CCL), this is a good cruise stock to invest in.
8. Nippon Yusen Kabushiki Kaisha (OTCMKTS: NPNYY)
Number of Hedge Fund Holders: N/A
Nippon Yusen Kabushiki Kaisha (OTCMKTS: NPNYY) is a sea, land, and air transportation service provider. The company operates worldwide and offers a range of services, including liner trading and air cargo transportation services. It ranks 8th on our list of the best cruise stocks to buy now.
For the fiscal first quarter of 2021, Nippon Yusen Kabushiki Kaisha (OTCMKTS: NPNYY) had $3.34 billion in revenue, and it also has a gross profit margin of 14.5%. The stock has grown 39.55% in the past three months versus the S&P 500’s 8.47% growth. It has also gained 126.7% in the past 6 months and 114.1% year to date. According to the Wall Street Journal, Nippon Yusen Kabushiki Kaisha (OTCMKTS: NPNYY) has a consensus Buy rating.
Like the Royal Caribbean Group (NYSE: RCL), Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH), and Carnival Corporation & plc (NYSE: CCL), this is a good cruise stock to invest in.
7. Lindblad Expeditions Holdings, Inc. (NASDAQ: LIND)
Number of Hedge Fund Holders: 11
Lindblad Expeditions Holdings, Inc. (NASDAQ: LIND) provides expedition cruising and adventure traveling opportunities. It has a fleet of nine owned expedition ships alongside five seasonal charter vessels operating under the Lindblad brand. The company ranks 7th on our list of the best cruise stocks to buy now.
In June, Lindblad Expeditions Holdings, Inc. (NASDAQ: LIND) revealed that the company’s CEO Dolf Berle, bought about 36,500 shares of common stock in May, worth about $636,000. Deutsche Bank also raised the stock’s price target from $14 to $16 this May. This March, Lindblad Expeditions Holdings, Inc. (NASDAQ: LIND) announced that they would be resuming operations in 2021, just in time for the voyage season in Alaska and Galápagos in June. The stock rose after the announcement. In the first quarter of 2021, the company’s EPS was -$0.66 versus estimates of -$0.55. Its revenue for the quarter was $1.78 million, beating estimates by $0.85 million. The stock has gained 3.21% in the past 6 months and 3.74% year to date.
By the end of the first quarter of 2021, 11 hedge funds out of the 866 tracked by Insider Monkey held stakes in Lindblad Expeditions Holdings, Inc. (NASDAQ: LIND). Their total stake value was roughly $105 million. This is compared to 11 hedge fund holders with a total stake value of roughly $99 million in the previous quarter. Like the Royal Caribbean Group (NYSE: RCL), Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH), and Carnival Corporation & plc (NYSE: CCL), this is a good cruise stock to invest in.
6. OneSpaWorld Holdings Limited (NASDAQ: OSW)
Number of Hedge Fund Holders: 11
OneSpaWorld Holdings Limited (NASDAQ: OSW) is a company that operates health and wellness centers on board its cruise ships and at destination resorts around the world. The company offers services such as salon and skincare services and products, self-service fitness facilities, and specialized fitness classes, among others. It ranks 6th on our list of the best cruise stocks to buy.
On June 24th, OneSpaWorld Holdings Limited (NASDAQ: OSW) announced the price of its secondary stock offering of 8,421,053 common shares. The stock offering has been priced at $9.5. In the first quarter of 2021, OneSpaWorld Holdings Limited (NASDAQ: OSW) had an EPS of -$0.21. Its revenue for the quarter was $5.59 million, beating estimates by $1.79 million. The stock has also gained 16.22% in the past 6 months and 8.53% year to date.
By the end of the first quarter of 2021, 11 hedge funds out of the 866 tracked by Insider Monkey held stakes in OneSpaWorld Holdings Limited (NASDAQ: OSW). Their total stake value was roughly $130 million. This is compared to 12 hedge fund holders with a total stake value of roughly $115 million in the previous quarter. Like the Royal Caribbean Group (NYSE: RCL), Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH), and Carnival Corporation & plc (NYSE: CCL), OneSpaWorld Holdings Limited (NASDAQ: OSW) is a good cruise stock to invest in.
FAM Funds, an investment management firm, mentioned OneSpaWorld Holdings Limited (NASDAQ: OSW) in their fourth-quarter 2020 investor letter. Here’s what they said:
“In late January, we introduced a new idea into the Fund — OneSpaWorld (OSW). In hindsight, this move was unfortunate. OSW’s primary business lies in managing spas on cruise ships, almost all of which outsource spa services. OSW dominates the business with more than 90% market share and is typically highly profitable. Historically, OSW grew through recessions and past virus outbreaks like H1N1, SARS, and MERS, as cruise ship owners slashed ticket prices to keep their vessels full. At the time of our purchase, COVID-19 looked, to us, comparable to past viruses. By the time it was clear that it was a serious threat to the industry, the stock price had collapsed. While both frustrated and disappointed, we decided that the right course of action was to hold our position. We believe that, eventually, the public will resume cruising and OSW should benefit. As optimism grew in the second half of the year about the potential for improved cruising conditions, the stock price partially rebounded.”
Click to continue reading and see the 5 Best Cruise Stocks to Buy Now.
Suggested articles:
- 15 Biggest Travel Companies
- 10 Best Travel Stocks to Buy Right Now
- 15 Largest Cruise Companies In The World
Disclosure: None. 10 Best Cruise Stocks to Buy Now is originally published on Insider Monkey.
