Should You Avoid Royal Caribbean Cruises Ltd. (RCL)?

Due to the fact that Royal Caribbean Cruises Ltd. (NYSE:RCL) has faced declining sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of hedgies that elected to cut their entire stakes in the third quarter. Intriguingly, Richard Barrera’s Roystone Capital Partners dropped the largest position of the 700 funds followed by Insider Monkey, totaling about $126 million in stock, and Aaron Cowen’s Suvretta Capital Management was right behind this move, as the fund dropped about $44.6 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 2 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Royal Caribbean Cruises Ltd. (NYSE:RCL). We will take a look at Consolidated Edison, Inc. (NYSE:ED), Ameriprise Financial, Inc. (NYSE:AMP), Cummins Inc. (NYSE:CMI), and CBS Corporation (NYSE:CBS). All of these stocks’ market caps are similar to RCL’s market cap.

As you can see these stocks had an average of 37 hedge funds with bullish positions and the average amount invested in these stocks was $1.32 billion. That figure was $1.19 billion in RCL’s case. CBS Corporation (NYSE:CBS) is the most popular stock in this table. On the other hand Consolidated Edison, Inc. (NYSE:ED) is the least popular one with only 14 bullish hedge fund positions. Royal Caribbean Cruises Ltd. (NYSE:RCL) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CBS might be a better candidate to consider a long position.