5 Best Vacation Stocks to Buy Now

3. Royal Caribbean Group (NYSE: RCL)

Number of Hedge Fund Holders: 37 

Royal Caribbean Group (NYSE: RCL) is a Miami-based firm that organizes cruise tours. Some of the lines it operates include Silversea Cruises, Azamara, Celebrity Cruises, and others. The vacations organized by the firm travel to hundreds of different global locations. The company also owns the ships used for these cruise offerings. It was founded in 1968 and is placed third on our list of 12 best vacation stocks to buy now. More than 130,000 people can take a vacation when the firm is operating the ships at full capacity. 

On April 29, Royal Caribbean Group released quarterly earnings and reported earnings per share of -$4.44, beating market estimates by $0.17. The quarterly revenue was $42 million, still a long way off from pre-pandemic highs. Although the firm has been impacted heavily by COVID-19, it is hopeful for the rest of 2021 as operations are set to resume fully in the coming weeks. 

Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in the firm with 2.1 million shares worth more than $161 million.  

In one of their investor letters, Tidefall Capital Management highlighted a few stocks and Royal Caribbean Cruises Ltd (NYSE:RCL) is one of them. Here is what Tidefall Capital Management said:

“Part of our positive return was due to our purchase of put options on Royal Carribean stock as a form of portfolio insurance. These options gave us the right to sell the stock at $40 in June; at the time the stock was $65. Given the lethality of Covid-19 and the heightened risk to the older customer base of cruise passengers, the put options priced at $2.74 appeared to offer a case of ‘heads I lose a little, tails I win a lot.’ (The most we could have lost was 2% of the fund). Government support seemed unlikely since all major cruise operators are incorporated abroad to avoid paying US corporate income taxes. Fortunately, in one week Royal Carribean stock declined by more than half to $30 and the options increased in value to $15.30, more than five times our cost.”