6) Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)
Short % of Float (As of 15 August): 8.09%
Number of Hedge Fund Holders: 31
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) operates a fleet of passenger cruise ships. It offers an array of cruise itineraries and theme cruises and markets its services via various distribution channels.
Short sellers believe that Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) continues to struggle with low margins, increased costs, and elevated weighted cost of capital in comparison to returns on invested capital. In 2Q 2024, the company’s total cruise operating expense came in at $1.45 billion as compared to $1.38 billion in 2Q 2023. The short sellers believe that margins for the company would be negatively impacted in 2H 2024 as costs continue to increase at a faster pace than total revenue. Also, the Red Sea sailings cancellation has impacted luxury brand performance, which has weighed upon 4Q 2024 expectations. Short sellers believe that increased oil prices and unfavorable foreign exchange might elevate costs in the remaining half of 2024.
However, Wall Street analysts believe that the strong demand for European, Caribbean, and Alaskan sailings should help it offset the short-term challenges. Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)’s optimal book position saw an improvement as a result of better analytics and revenue management tools. Market experts opine that attractive itineraries, together with tactical revenue management, and data-driven marketing should continue to fuel sales growth.
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) continues to focus on right-sizing its cost base and improving margins to strengthen the foundation for profitable growth. Its young average fleet and solid liquidity position should continue to provide competitive advantages.
The Goldman Sachs Group upped their target price on the shares of Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) from $19.00 to $21.00, giving it a “Neutral” rating on 28th May. As per Insider Monkey’s 2Q 2024 database, 31 hedge funds reported holding stakes in the company.
Ariel Investments, an investment management company, released its 3Q 2023 investor letter and mentioned Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH). Here is what the fund said:
“Lastly, Cruise ship operator, Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) traded lower in the quarter. The stocks strong price appreciation ̶up 34.64% year-to-date ̶ drove profit taking following an underwhelming outlook relative to Royal Caribbean Group’s upward guidance revision. Notably, NCLH continues to deliver record cumulative bookings as well as increased occupancy capacity at higher prices. The company remains focused on right sizing its cost base and improving margins to strengthen its foundation for sustainable and profitable growth. Meanwhile, the company executed on its leadership succession plan, with 15-year veteran, Harry J. Sommer’s recent appointment to CEO. With an experienced management team at its helm, a young average fleet and solid liquidity position, we remain enthusiastic about the name.”
