We recently published a list of Jim Cramer’s Latest Lightning Round: Top 10 Stocks. Since Royal Caribbean Cruises Ltd (NYSE:RCL) ranks 7th on the list, it deserves a deeper look.
Jim Cramer in a latest program on CNBC said that the market has already priced in the expected positive comments from the Fed Chair Jerome Powell at the Jackson Hole event in Wyoming. Cramer said some bulls might be hoping for an indication of “multiple rate cuts,” but that’s “not gonna happen.”
Cramer talked about the latest 8-day winning streak of the market which he called a “resurrection.” He said that almost “anything” during these days went up. Even the companies with “bad” results went up because investors thought they would improve once the Fed begins to cut interest rates, Cramer said.
“But that was then, this is now. Since the winning streak ended we are starting to get into what I call the buyer’s remorse phase of this move. Stocks have had a nice run based on nothing more than hope are now rolling over hard.”
Jim Cramer also pointed to the possible events in the coming months that could keep the markets depressed:
“Maybe the Fed is already too late and the economy will get real ugly or maybe traders are beginning to fear the possibility of a democratic sweep in November which could lead to higher corporate tax rate, bad for earnings. And a potential witchhunt for price gouging in the aisles of the supermarket and the drug stores.”
For this article we picked 10 stocks Jim Cramer talked about during his latest programs on CNBC. With each company we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Royal Caribbean Cruises Ltd (NYSE:RCL)
Number of Hedge Fund Investors: 48
A caller recently asked Jim Cramer about his thoughts on Norwegian Cruise Lines. He instead recommended Royal Caribbean Cruises Ltd (NYSE:RCL) as a better buy.
“I like Royal Caribbean Cruises because every time that stock is down there are like thousands of buyers come in, every time Norwegian is down, nobody cares.”
Royal Caribbean Cruises Ltd (NYSE:RCL) is benefitting from strong demand from younger customers as people around the world continue to spend on experiences despite inflation. Secular growth trends are expected to keep boosting the company. The global cruise passenger numbers hit 31.7 million last year, a 7% increase over pre-pandemic levels. Projections suggest this figure could approach 40 million by 2027, highlighting the robust demand for cruise vacations.
Amid the after-effects of the pandemic, cruise companies have been reluctant when it comes to expansion of capacity and new orders. This resulted in a shortage of ships, which gives giants like Royal Caribbean Cruises Ltd (NYSE:RCL) a space to raise prices. Royal Caribbean saw its net yield—revenue per passenger per cruise day—rise 13% in Q2 2024 year-over-year.
The company raised its full-year EPS guidance to $11.25-$11.45 per share, reflecting 68% year-over-year growth, surpassing the consensus of $11.07 per share. Additionally, Royal Caribbean Cruises Ltd (NYSE:RCL) reinstated its quarterly dividend at $0.40 per share, the first since its suspension in 2020.
Ariel Fund stated the following regarding Royal Caribbean Cruises Ltd. (NYSE:RCL) in its Q2 2024 investor letter:
“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.”
Overall, Royal Caribbean Cruises Ltd (NYSE:RCL) ranks 7th on Insider Monkey’s list titled Jim Cramer’s Latest Lightning Round: Top 10 Stocks. While we acknowledge the potential of Royal Caribbean Cruises Ltd (NYSE:RCL), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than RCL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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