It’s no secret that cruise line stock prices were hurt most by the coronavirus pandemic. They’re among the most-held stocks by largely millennial investors on trading app Robinhood.
In fact, six of the 32 most-held stocks on the platform are travel stocks — airlines and cruise lines — with Carnival Corp. (NYSE: CCL), Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) and Royal Caribbean Group (NYSE: RCL) all cracking the top 30.
WealthPress trader Jeff Yastine was bullish on cruise lines from August until late November, when he said it was time to sell both cruise and airlines. The big reason was because Jeff felt they were due for a pullback coming off a big bounce that week.
Since peaking on Dec. 3, Carnival has indeed pulled back about 15%.
And cruise lines stocks could fall another 30% in the coming months…
Jeff doesn’t expect a huge plunge or anything. But he also doesn’t expect them to get any of their mojo back and move higher any time soon. The biggest issue cruise line investors need to be aware of is a total lack of catalysts to push the stocks upward.
Carnival gave a recent update to Wall Street analysts, as public companies often do. Carnival said it can’t predict when its fleet will return to normal operations. But the key part of the announcement was its cash burn, which was $500 million a month in the fourth quarter of 2020.
Carnival finished this past year with $9.5 billion in cash and capital.
So basically they have this big pile of cash, but their ships are mothballed and out of use. The hope is Carnival has enough money to last until it’s able to get its ships up and running — with paying customers on them.
The numbers may be different, but this goes for all cruise lines.
The good news for investors is cruise line stock prices should be super cheap and a buying opportunity once there’s a light at the end of the tunnel.
Check out Jeff’s short video on tanking cruise line stock prices and let’s dive into what’s ahead. Then share your thoughts in the comments below.