11 Best Cruise Stocks To Buy Right Now
In this article, we discuss 11 best cruise stocks to buy right now. If you want to see more stocks in this selection, check out 5 Best Cruise Stocks To Buy Right Now.
The cruise industry was one of the hardest hit tourism sectors amid the peak COVID years. However, CNN Travel expects a meaningfully smoother sail for cruises ahead. According to the top global cruise industry trade group, Cruise Lines International Association (CLIA), over 75% of its member ships have resumed their services, with almost all of its cruise ships expected to be sailing by late summer.
CLIA projects passenger metrics to surpass the pre-pandemic levels by the end of 2023. Similarly, according to Cruise Industry News, about 40 new ships are expected to hit the market this year, and more than 75 vessels have already been ordered through 2027. In late April, Colleen McDaniel, editor-in-chief of leading cruise review website Cruise Critic, said:
"We're seeing shoppers and cruise bookings increase week after week, which is fantastic news for the industry."
In November 2021, CLIA's member cruise lines announced that they will become carbon neutral by 2050, in line with the United Nations' net-zero global emissions goal. In order to achieve zero carbon, the cruise industry is gradually moving towards reducing emissions via shore-power connectivity, which means enabling ships to switch off their engines and plug in at ports. CLIA will have 174 ships with shore-power connectivity by 2027, however, only about 14 global ports presently provide the connectivity infrastructure. The demand in the cruise sector can potentially weather the inflationary headwinds, and investors who would like to get in on the action can buy stocks like Marriott International, Inc. (NASDAQ:MAR), Expedia Group, Inc. (NASDAQ:EXPE), and Booking Holdings Inc. (NASDAQ:BKNG).
Photo by Stephanie Klepacki on Unsplash
Our Methodology
We selected firms that operate in the cruise industry, picking stocks based on future growth potential, underlying business fundamentals, optimistic analyst coverage, and strong hedge fund sentiment.
We have arranged the list according to the hedge fund sentiment around the securities, which was assessed from Insider Monkey’s Q2 2022 database of about 900 elite hedge funds.
Best Cruise Stocks To Buy Right Now
11. Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND)
Number of Hedge Fund Holders: 11
Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) is a New York-based company that provides expedition cruising and land-based adventure travel experiences. The company offers fleet voyage ships and seasonal charter vessels under the Lindblad brand. Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND)’s Q2 2022 revenue of $90.9 million climbed 495.7% year-over-year. There were robust reservations for future travel, and bookings for 2023 came in at 26% ahead of bookings for 2020.
On August 2, Craig-Hallum analyst Alex Fuhrman maintained a Buy recommendation on Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) but lowered the price target on the stock to $15 from $23 to factor in lower peer valuations. The analyst observed that Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) posted better than anticipated Q2 results, with better-than-expected revenue and a smaller-than-expected EBITDA loss.
According to Insider Monkey’s data, 11 hedge funds held stakes worth $87 million in Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) at the end of June 2022, compared to 10 funds in the prior quarter worth $104.3 million.
In addition to Marriott International, Inc. (NASDAQ:MAR), Expedia Group, Inc. (NASDAQ:EXPE), and Booking Holdings Inc. (NASDAQ:BKNG), Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) is one of the best cruise stocks to buy right now.
10. World Fuel Services Corporation (NASDAQ:INT)
Number of Hedge Fund Holders: 15
World Fuel Services Corporation (NASDAQ:INT) was incorporated in 1984 and is headquartered in Miami, Florida. The company engages in the distribution of fuel to the aviation, marine, and land transportation industries worldwide. Its Marine segment markets fuel, lubricants, and related products and services to commercial cruise lines. In Q2 2022, World Fuel Services Corporation (NASDAQ:INT) posted market-beating results, with non-GAAP earnings per share of $0.41 and a revenue of $17.12 billion, outperforming estimates by $0.12 and $5.03 billion, respectively. Revenue in the second quarter gained 141.5% on a year-over-year basis.
On September 13, World Fuel Services Corporation (NASDAQ:INT) declared a $0.14 per share quarterly dividend, a 17.0% increase from its prior dividend of $0.12. The dividend is payable on October 7, for shareholders of record on September 23. World Fuel Services Corporation (NASDAQ:INT)’s dividend yield on September 30 came in at 2.35%.
In mid-May, Stifel analyst Benjamin Nolan upgraded World Fuel Services Corporation (NASDAQ:INT) to Buy from Hold with an unchanged price target of $35. The shares are "generally cheap on any measure," the analyst told investors in a research note. He said the company should be able to earn at least $2.50 per share next year with free cash flow exceeding $4.00 per share.
According to Insider Monkey’s data, 15 hedge funds were bullish on World Fuel Services Corporation (NASDAQ:INT) at the end of Q2 2022, compared to 11 funds in the prior quarter. Ali Motamed’s Invenomic Capital Management is the leading position holder in the company, with 966,902 shares worth about $20 million.
Here is what Bernzott Capital Advisors has to say about World Fuel Services Corporation (NASDAQ:INT) in its Q4 2020 investor letter:
“World Fuel Services (INT): A distributor of transportation fuels in aviation, land and marine markets, INT has unsurprisingly experienced weakness in 2020 but is set to return to mid-teens ROIC from current single digit levels, and the stock should appreciate as this occurs. The stock is an economic reopening beneficiary. Meanwhile, the company should see payoff from its inward focus in the recent couple years on integrating prior acquisitions, cost reduction, and “high-grading” its business, reducing low margin activities. Its balance sheet is its strongest in a decade, now in a net cash position after significant counter-cyclical free cash flow generation, and M&A activity may resume, a positive. The stock’s valuation is below historical levels.”
9. Agilysys, Inc. (NASDAQ:AGYS)
Number of Hedge Fund Holders: 16
Agilysys, Inc. (NASDAQ:AGYS) was founded in 1932 and is headquartered in Alpharetta, Georgia. The company provides hardware and software products and services to the hospitality industry in North America, Europe, the Asia Pacific, and India. It offers its solutions to resorts and cruise, hotel, corporate food service management, restaurant, education, gaming, and healthcare industries. Agilysys, Inc. (NASDAQ:AGYS) reiterated its FY23 annual revenue guidance of $190 million to $195 million, whereas consensus stood at $192.84 million.
On September 16, Northland analyst Nehal Chokshi raised the price target on Agilysys, Inc. (NASDAQ:AGYS) to $67 from $61 and maintained an Outperform rating on the shares. He lifted his long-term growth rate estimate to 20% from 18%, contending that Agilysys, Inc. (NASDAQ:AGYS)'s rebranded marketing program is "showing early signs of driving bookings to the next level."
According to Insider Monkey’s second quarter database, 16 hedge funds reported owning stakes in Agilysys, Inc. (NASDAQ:AGYS), up from 13 funds in the earlier quarter. Michael Kaufman’s MAK Capital One is the leading position holder in the company, with roughly 4 million shares amounting close to $187 million.
8. Royal Caribbean Cruises Ltd. (NYSE:RCL)
Number of Hedge Fund Holders: 28
Royal Caribbean Cruises Ltd. (NYSE:RCL) is a Florida-based cruise company which operates cruises worldwide under the Royal Caribbean International, Celebrity Cruises, Azamara, and Silversea Cruises brands. On September 22, in its latest SEC filing, Royal Caribbean Cruises Ltd. (NYSE:RCL) revealed that bookings are notably exceeding 2019 levels, indicating strong demand patterns. The company expects bookings in 2023 to rise at higher rates to "historical ranges". Royal Caribbean Cruises Ltd. (NYSE:RCL) is one of the best cruise stocks to invest in.
On September 19, Stifel analyst Steven Wieczynski raised the price target on Royal Caribbean Cruises Ltd. (NYSE:RCL) to $70 from $60 and reiterated a Buy rating on the shares. The analyst noted that bookings have significantly accelerated since Labor Day as COVID restrictions were lifted, with cancellation rates also normalizing. He feels "comfortable enough" to meaningfully "raise" his 2023/2024 EBITDA estimates based on ongoing strength in bookings and pricing trends.
According to Insider Monkey’s Q2 data, 28 hedge funds were long Royal Caribbean Cruises Ltd. (NYSE:RCL), compared to 36 funds in the last quarter. John W. Rogers’ Ariel Investments is the largest stakeholder of the company, with 2.4 million shares worth $85.3 million.
7. Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)
Number of Hedge Fund Holders: 28
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) was founded in 1966 and is based in Miami, Florida. It is a cruise company offering its services in North America, Europe, the Asia-Pacific, and internationally. Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) operates under the Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands. It is one of the best cruise stocks to buy now.
On September 20, Truist analyst Patrick Scholes upgraded Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) to Buy from Hold with a price target of $19, up from $18. The analyst stated that looking at big travel agencies specializing in cruises, as well as "big data" on future bookings and pricing, there has been a significant increase in booking volumes. The luxury segment has seen higher bookings by nearly 40%, and Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) seems to be best positioned to capture this market strength, the analyst told investors.
According to Insider Monkey’s data, 28 hedge funds reported owning stakes worth $287.2 million in Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH), compared to 35 funds in the prior quarter worth $540 million. John W. Rogers’ Ariel Investments is the leading stakeholder of the company, with 6.40 million shares valued at $71.2 million.
In its Q4 2021 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) was one of them. Here is what the fund said:
“Norwegian Cruise Line Holdings Ltd (NCLH) continued to get hit from worsening headlines in relation to the Omicron variant. The stock declined 21.5% during the quarter following worse-than-expected 3Q results. The company reported revenues of $153M below consensus of $247M with EPS coming in at -$2.17 versus expectations for -$2.04. The company reported that 40% of its capacity was operating by the end of 3Q and they expect 75% to be operating by the end of 2021 with the full fleet back up and running by April 1, 2022. They also highlighted that they expect to be operating cash flow positive in late 1Q22 and profitable for the second half of 2022. The company announced a refinancing transaction, issuing $1Bn of new 1.125% exchangeable notes due 2027 and raising another $1.1Bn through the sale of 46.8M new shares at $23.64. Proceeds are being used to redeem up to $1.215Bn of debt with a blended interest rate of 8.1%, implying annual interest savings of $88M” (…read more)
6. Sabre Corporation (NASDAQ:SABR)
Number of Hedge Fund Holders: 38
Sabre Corporation (NASDAQ:SABR) is a Texas-based company that provides software and technology solutions for the travel industry worldwide. Sabre Corporation (NASDAQ:SABR)’s Travel Solutions segment operates as a business-to-business travel marketplace that offers inventory, prices, and availability from multiple travel companies, including airlines, hotels, car rental brands, rail carriers, cruise lines, and tour operators. Sabre Corporation (NASDAQ:SABR) beat estimates for earnings and revenue in Q2 2022, and ended the quarter with a cash balance of $1.0 billion.
On September 28, Redburn analyst James Goodall initiated coverage of Sabre Corporation (NASDAQ:SABR) with a Buy rating. Sabre Corporation (NASDAQ:SABR)’s turnaround story is underpinned by technology shift, said the analyst, who contended that his estimates are "slightly below" consensus for this year and next, but "well ahead" from FY24.
According to Insider Monkey’s Q2 data, 38 hedge funds were bullish on Sabre Corporation (NASDAQ:SABR), with combined stakes amounting to $435 million. Terry Smith’s Fundsmith LLP is the leading stakeholder of the company, with 22.4 million shares worth $131 million.
Like Marriott International, Inc. (NASDAQ:MAR), Expedia Group, Inc. (NASDAQ:EXPE), and Booking Holdings Inc. (NASDAQ:BKNG), elite hedge funds are piling into Sabre Corporation (NASDAQ:SABR) for exposure to the cruise industry.
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Disclosure: None. 11 Best Cruise Stocks To Buy Right Now is originally published on Insider Monkey.
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