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RCL Stock Prices - Insights?


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I've started doing a bit of investing myself and taking a look at the RCL stock prices, it seems like there's been a steep drop. While I understand that this is happening across several industries, wondering if there are any insights here as to why this is happening specifically for RCL and if based on any opinions here - is now actually a good time to buy?

Thanks! 

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16 minutes ago, KLA said:

I've started doing a bit of investing myself and taking a look at the RCL stock prices, it seems like there's been a steep drop. While I understand that this is happening across several industries, wondering if there are any insights here as to why this is happening specifically for RCL and if based on any opinions here - is now actually a good time to buy?

Thanks! 

All cruise lines are down on the fears of a recession (reducing revenues), high fuel prices (now moderating), and higher interest rates (for borrowing to cover current shortfalls).  Technical analysts don't like the way the charts look (trending down).  I am not selling any shares now, but I followed Lucent down to pennies per share, so I offer no advice.  Just trying to share what I have read/observed. 

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If you google long enough you'll find all sorts of investor opinions that range from "good time to buy" to "stock prices could reach zero".  With all the debt involved my opinion is that you have to be in it for the long run, like several years, if you are truly seeking an investment for potential gains.  It's a crystal ball question.  My crystal ball thinks that stock prices will recover and at some point triple what they are today and more.  Where my crystal ball is cloudy on how long that will take. 

There is some risk involved which is why stock prices are low.  Questions linger about how a recession could impact the cruise lines that are struggling from a pandemic that still isn't fully over yet.  If any one could safely predict exactly what will happen with this or any stock they'd be in high demand.  

My gut says stock prices will fall further but that's a wild guess at best.

Stock trading is basically legal gambling.  There will be winners and losers.    Just like money spent in a casino it had better be play money that won't hurt you financially if you lose it all.  Betting your family nest egg and going all in would not be wise.  

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15 minutes ago, twangster said:

Stock trading is basically legal gambling.  There will be winners and losers.    Just like money spent in a casino it had better be play money that won't hurt you financially if you lose it all.  Betting your family nest egg and going all in would not be wise.  

Haha, thanks for the reminder and advice. This is definitely 'fun' money and I'm prepared to let it sit for a while - just wanted to get some insights from those who may have been paying attention for longer. 

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Like everyone else here, the only advice I'm offering is never, ever invest more than you can afford to lose.

That said, I can't help but think the shareholder benefit makes the stock attractive.  If you're lucky enough to be retired and cruise 7 days per month,  then the benefit would be $1200 per year.

At $35 per share ($3500 for 100 shares to get the benefit), you would have your investment back in just 3 years.

Btw carnival would be less than 1 year!

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2 hours ago, steverk said:

Like everyone else here, the only advice I'm offering is never, ever invest more than you can afford to lose.

That said, I can't help but think the shareholder benefit makes the stock attractive.  If you're lucky enough to be retired and cruise 7 days per month,  then the benefit would be $1200 per year.

At $35 per share ($3500 for 100 shares to get the benefit), you would have your investment back in just 3 years.

Btw carnival would be less than 1 year!

Agreed - I look at it for the shareholder credit for now under the assumption the company will remain.

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2 hours ago, steverk said:

Like everyone else here, the only advice I'm offering is never, ever invest more than you can afford to lose.

That said, I can't help but think the shareholder benefit makes the stock attractive.  If you're lucky enough to be retired and cruise 7 days per month,  then the benefit would be $1200 per year.

At $35 per share ($3500 for 100 shares to get the benefit), you would have your investment back in just 3 years.

Btw carnival would be less than 1 year!

Not quite there yet -but that's an interesting thought. 

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51 minutes ago, smokeybandit said:

Random, but is that shareholder credit technically taxable income?

I would argue it’s not as it is similar to a “rebate” -  Like OBC from on board booking or cash back credit cards, you are receiving a portion of your spend back.  Probably one of the reasons why casino bookings aren’t eligible.  And If it was taxable, the IRS would have found a way to require RC to issue a 1099.

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I have gone as far as deducting a star class suite from my business income due to a conversation I had with Sugar Beach manager about almond topping quality and packaging upon learning it was my product.

This was several years ago and I’m not writing this in jail. I have not repeated this as my accountant recommended not jeopardizing my 1 for 1 record. 

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3 hours ago, steverk said:

Btw carnival would be less than 1 year!

That is assuming that Carnival can recover before it goes out of business!!! 😉

I bought my 100 shares of CCL and RCL last year during at good prices and now I'm negative with CCL.  Ben reading a lot about how much trouble Carnival is in now.  Truth is I have not cruised on Carnival since 2012 when we are on their first cruise out of Boston on the Glory.  That cruise was a mess.  We couldn't board until about 2AM due to a bunch of issues.  We vowed to never cruise on Carnival again.  So I am not sure why I bought the stock.  Trying to strike it rich I guess...

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Here is my personal opinion on what is going on with RCL stock and also other cruise stocks. Disclaimer: I am not a professional investor this is just my opinion. 

1) Cruise line stocks have had a huge dip most likely due to the macroeconomic pressures: - Inflation of goods/resources/employees - Tightening of the borrowing market (eg its harder to borrow money as many central banks have increased their rates) - Supply chain issues (delays in obtaining goods/resources) - Recession fears if we do go into a full blown recession discretionary spending will take a hit. This means if people take a pay cut or lose their jobs they won't be traveling as much. 

2) Covid/ Public health: Covid will always be part of cruising just like other viral outbreaks. However cruising overall has a high public image of being more unsafe than other travel/vacations. The Asian markets have not fully returned to full cruising as well due to covid. 

3) Worldwide tensions: There are ongoing tensions going around the world not only the issues in Ukraine, but other areas of the world. This has impacted cruising and could impact cruising in the future

4) Environmental Impact of cruising: There is growing public knowledge of the environmental impact of cruising. Cruise lines understand this are taking steps to decrease their impact eg. utopia OTS LNG fuel, environmental stewardship programs onboard and at the company level. But this all costs money and capital investment is needed by the cruise lines

 

With all this stated I do believe that cruise lines are undervalued at this point in time. However the volatility of cruise stocks will continue in the short term. I do think that cruise stocks will recover in the next few years. As a long term buy and hold I think it will be fine. 

I personally have bought additional stock and plan on buying more to get to the 100 shares for the share holder credit on future cruises. 

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1 hour ago, Matt said:

This is also the point in this thread where I remind everyone don't take investing advice from anyone on the internet. None of us are professionals and there are risks with investing.

😉  As Cajun Chef Justin Wilson used to say ''I gha-rawn-tee!"... 😉

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1 hour ago, Matt said:

This is also the point in this thread where I remind everyone don't take investing advice from anyone on the internet. None of us are professionals and there are risks with investing.

Well there probably are some professionals on this board, but they ain't giving out that info for free!

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26 minutes ago, smokeybandit said:

Well there probably are some professionals on this board, but they ain't giving out that info for free!

Free bad stock advice is better than bad stock advice for a fee.

In both cases one loses, but one doesn’t have a commission. 

*In this statement I am not inferring buying Royal Caribbean is a bad idea.

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Forward looking statement:  Except for historical information that has been proven factual, bad advice from the past is not an indication of current or future good advice.  Likewise, advice in the past that has eventually been proven to be good advice is not an indication that current or future advice is neither good or bad, merely a statement of advice.

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3 hours ago, twangster said:

Forward looking statement:  Except for historical information that been proven factual, bad advice from the past is not an indication of current or future good advice.  Likewise, advice in the past that has eventually been proven to be good advice is not an indication that current or future advice is neither good or bad, merely a statement of advice.

Do not take financial advice if you are allergic to financial advice. Side effects of this advice may cause nausea, upset stomach, vomiting, fever, weight loss, weight gain, jaundice, headaches, or alien babies.

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I'm a terrible investor myself, so take my observation for what its worth.

I've watched the three big cruise stocks (Royal, Carnival, and Norwegian) since they took their massive cuts at the start of the pandemic.  Back when the entire industry was shut down, and people thought that shutdown was going to be a few months, the cruise companies, blocked from any US Federal aid since none of them are US domiciled companies, raised a lot of expensive debt and issued a massive amount of new shares.  I don't remember Royal in particular, but I know Carnival has almost twice as many shares out there as before the pandemic.  Which means that, even if they were sailing as full and as profitably as 2019, the share price should only be theoretically half the price it was in 2019.  But, of course, there's more.  That expensive debt they took on is equal to several years worth of their best year of total income, not even net profits.

Those investors expect their money back with interest and any hiccup in being able to service that debt (such as a recession leading to a drop off in bookings) will result in bankruptcy.  And on top of all that, you have all the inflation driven higher costs of operation that no one was expecting back in 2020 when the cruise companies were taking on all that debt.  Overall, I still think at least one of the majors is going to fall into a bankruptcy reorganization in the next few years.  Which that will be, I don't know. 

So, despite the tempting low looking share prices, I've never been able to bring myself to put any money on these guys.  If one of them does go into bankruptcy, share prices go to zero and, unlike big American companies like GM or the airlines, the US Federal government is not likely to do anything to help the cruise lines avoid or easily navigate a bankruptcy reorg.

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