This Hedge Fund is Buying Norwegian Cruise Line Holdings Despite Losses from Coronavirus

Miller Value Partners, an investment management firm, published its ‘Opportunity Equity’ fourth-quarter 2020 Investor Letter – a copy of which can be seen here. A net return of 35.4% was recorded by the fund for the Q4 of 2020, outperforming its S&P 500 benchmark that delivered a 12.15% return. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Miller Value Partners, in their Q4 2020 Investor Letter, said that Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) was added in their portfolio in the fourth quarter of 2020. Norwegian Cruise Line Holdings Ltd. is a cruise line company that currently has a $6.4 billion market cap. For the past 3 months, NCLH delivered a decent 17.35% return and settled at $23.54 per share at the closing of February 12th.

Here is what Miller Value Partners has to say about Norwegian Cruise Line Holdings Ltd. in their Q4 2020 investor letter:

“In the squarely value camp, we bought Norwegian Cruise Lines in the fourth quarter. The sector has obviously been one of the hardest hit by COVID with business shut down. It should be one of the biggest beneficiaries of a normalization due to vaccines and infections helping us reach herd immunity at some point. As we got clarity around vaccine efficiency and potential timelines for disbursement, it enabled us to analyze the ability of cruise lines to make it through and what the potential balance sheet and earnings power might look like on the other side. We think Norwegian is worth somewhere in the $40s with a good ability to withstand the crisis. We think the recovery in travel is more likely to beat current recovery expectations than it is to fall short, setting up a nice risk-reward.”

Most Expensive Cruises in the World

Last September, we published an article telling that  Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) was in 28 hedge fund portfolios. Its all time high statistics is 42. NCLH delivered a -7.43% return YTD.

Our calculations show that Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) does not belong in our list of the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.