Billionaire Daniel Sundheim’s Top 15 Stock Picks Heading Into 2025

4. Royal Caribbean Cruises Ltd. (NYSE:RCL)

D1 Capital Partners’ Equity Stake: $278.50 Million

Number of Hedge Fund Holders as of Q3 2024: 52

Royal Caribbean Cruises Ltd. (NYSE:RCL) is a travel services company that operates cruises worldwide. With 68 ships, it benefits from economies of scale and favorable supplier terms.

Royal Caribbean Cruises Ltd. (NYSE:RCL) has succeeded in bringing in more than $13 billion in revenue in 2024, given that 26% of all cruise passengers travel in one of its ships. In addition, the company is profitable, with its net income for the first nine months of the year having soared 64% to $2.3 billion. Royal Caribbean has maintained pricing power and achieved favorable yield-to-cost spreads thanks to its strong financial position and unique product offerings.

Royal Caribbean Cruises Ltd. (NYSE:RCL) focuses on exclusive destinations and innovative ships. Its large family-oriented ships attract a broad clientele and increase yields. Private destinations like Perfect Day at CoCoCay set it apart from competitors, raise ticket prices, and boost shoreline spending. The company’s strategy of deploying advanced ships and expanding private destinations is expected to enhance profitability.

Ariel Investments, an investment management firm, shared insights in its second-quarter 2024 investor letter, stating:

“Global cruise vacation company, Royal Caribbean Cruises Ltd. (NYSE:RCL), advanced on another quarterly earnings beat and subsequent raise in full-year guidance. Stronger than anticipated consumer demand, healthy onboard spend, robust pricing and solid cost containment lifted recent results. Additionally, RCL is benefitting from several new megaships, more island destinations and re-entry into the China market. The resiliency of the core cruise consumer, in combination with management’s superior operational expertise and revised earnings outlook, lays the foundation for RCL to exceed its three-year strategic imperative, the Trifecta Program, a year earlier than expected.”