Full Steam Ahead for Royal Caribbean

Published on
April 18th, 2019
Topic
Technical Analysis, Valuation, Trading
Duration
10 minutes
Asset class
Equities

Full Steam Ahead for Royal Caribbean

Technical Trader ·
Featuring Fahad Khalid

Published on: April 18th, 2019 • Duration: 10 minutes • Asset Class: Equities • Topic: Technical Analysis, Valuation, Trading

Fahad Khalid, CIO of Jaguar Analytics, highlights one particular cruise company with growing pricing power: Royal Caribbean. Khalid analyzes the fundamentals, runs through the charts, and reviews how to make the play. Filmed on April 16, 2019 in Plymouth, Michigan.

Comments

Transcript

  • FK
    Fahad K.
    1 May 2019 @ 15:17
    Hope you all enjoyed the video and profited from it. RCL is up +7% today and reaching for new 52-week high after reporting blockbuster quarter. Net Yield is the single most important metric. — Q1 Net Yield +7.2% vs +6.1% estimate. On constant currency basis yield was up +9.3%. Fantastic. — Q2 Net Yield Guidance is +8.25% vs +6.5% estimate. On constant currency +9.5%. This means after already reporting huge growth in Q1, company is expecting further acceleration in Q2. — FY2019 Net Yield Guidance is range of +7.5% and +9%. Solid.
  • AK
    Aleksander K.
    26 April 2019 @ 11:18
    Plausible arguments for a short-term rally. However RCL is a capital intensive company in a relatively cyclical industry, and stock price been highly cyclical in past. P/B only higher than today in late 90s, end of 2015 and early 2018 last 25 years. All those instances with high P/B resulted in a consequent 35-50%+ crash. RCL crashed 50%+ in Jan&Feb 2000, months before most other equities.
  • RM
    Ryan M.
    20 April 2019 @ 16:44
    What about all the capacity that is coming online over the next few years?
  • CM
    C M.
    20 April 2019 @ 16:05
    Morningstar appears to agree: "Royal Caribbean's brands continue to drive repeat business, as the innovation and quality of its vacation products remain topnotch while offering a compelling value proposition to travelers. The oligopoly in which Royal operates (with Carnival and Norwegian) is amicable, and stable pricing should be supported by rational competition, as there has been a push to maintain pricing power across all the sizable operating peers in the group in recent years. A continued focus on pricing integrity, which avoids close-in discounting, could ensure the brand remains strong and ticket prices rise in the longer term, while the evolution of onboard offerings could spur incremental revenue growth." Like this trade. Morningstar has fair value at $133.
  • VH
    Vladislav H.
    19 April 2019 @ 15:17
    Very clear thoughts, and a decent idea . But with not the greatest RR. Please give him a spot under the sun to see if he can continue to be insightful.
  • gg
    georgy g.
    19 April 2019 @ 10:43
    More fahad pls, would be great to have him in a weekly show
  • HA
    Hammad A.
    19 April 2019 @ 04:13
    Seems like a good trade idea but forgot to mention any risks to this trade. Nice work Fahad !
  • SS
    Shanthi S.
    19 April 2019 @ 00:34
    Fahad is great communicator. Very clear. As another commenter said, it would be good to hear about the gross margins relative to competitors.
  • HJ
    Harry J.
    18 April 2019 @ 16:54
    Just my opinion, but I think If Fahad booked a cruise on rc he would change his mind. He may even be embarrassed about this call.
  • RM
    Richard M.
    18 April 2019 @ 15:37
    Good analysis Fahad, really enjoyed this!
  • SU
    Shakeel U.
    18 April 2019 @ 12:18
    It would have been helpful to hear about RC gross margin % and how this compares to it's competitors.