12015 Summary Recommend ¼ to ½ purchase at this time Place on a Watch List and buy on any corrections lt75 mid point 60 to 90 Missed a great entry point at 58 back at Oct 12 40 run from Oct to current ID: 146415
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Slide1
PDW Review Of RCL
1/2015Slide2
Summary
Recommend ¼ to ½ purchase at this time
Place on
a “Watch
List” and buy on
any corrections
(<$75 mid point, 60 to 90)
Missed a great entry point at $58 back at Oct 12 – 40% run from Oct to current
Lots of good news already
in the
stock price
Current risk/reward at low 80s – down 20 (Oct 14 lows) , up 10 (price targets)
Analyst are neutral, stock price targets are in low 90s
Longer fundamentals look positive, P/E fully valued, PEG strong buy
Solid US
(Miami) based
No. 2 cruse line with world wide exposure
Relatively higher debt (2x) Carnival is a mild concern
Excellent list of institutional owners
Tech indicators say neutral to close to over
bought
Cuba opening may offer growth area
Low oil prices (positive), increasing interest rates/strong dollar (positive for US cruisers), slowing world economy (
neutral – cruisers tend to be a more affluent demo)
Richard Fain (CEO) has 35 yrs and Jason Liberty (CFO) has 10 yrs experience, well trained and lots of shipping industry experience. Slide3
Profile 1
Royal
Caribbean Cruises Ltd.
1050 Caribbean Way
Miami, FL 33132
United States -
Map
Phone:
305-539-6000
Royal
Caribbean Cruises, Ltd. operates as a cruise company worldwide. It owns six cruise brands comprising Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, CDF Croisières de France, and TUI Cruises. The Royal Caribbean International brand provides cruise itineraries ranging from 2 to 18 nights with options for onboard dining, entertainment, and other onboard activities. The Celebrity Cruises brand offers cruise itineraries ranging from 3 to 18 nights various destinations; and operates onboard upscale ships that offer accommodations, fine dining, personalized services, and spa facilities. The Azamara Club Cruises brand offers cruise itineraries ranging from 4 to 18 nights that serve the up-market segment of the North American, the United Kingdom, and Australian markets. The Pullmantur brand provides cruise itineraries ranging from 4 to 12 nights with various cruising options and onboard activities for couples and families traveling with children. The CDF Croisières de France brand provides seasonal itineraries to the Mediterranean serving the French cruise market. The TUI Cruises brand provides onboard activities, services, shore excursions and menu offerings for the German cruise market. As of February 5, 2014, the company operated a total of 41 ships with an additional 6 under construction contracts on approximately 490 destinations on 7 continents. Royal Caribbean Cruises Ltd. was founded in 1968 and is headquartered in Miami, Florida
.Slide4
Profile 2 – RCL is No.2, best EPS, PEG < 1 is strong buy, P/S in line with CCLSlide5
Recent News – Also positive WSJ article (15% 2015 return predicted), – Cuba opportunities, major fuel savings in 2015, recent RCL downgrades, some analysts say Carnival is overall betterSlide6
Key Stats
RCL CCL
Trailing P/E =28 (fully valued) 25
Forward (5 yr) P/E=17 (LT BUY) 14
PEG(5 yr)=0.81 Strong BUY .90
Debt/Equity=78 (High) 35
Short Float %= 3 (No squeeze) 3
Book Value = $40.5/sh 32.4
Current P/E comparable to best in sector CCL
Future –
Med long
term buy with a 17 P/E and Strong Buy w/PEG of O.81
Profit margins similar to CCL
Gross profit s flat over last 2011-13 yrs, expect 14-15 to gap higher
Operating & net income down over 2011-13, expect 14-15 to gap higer
Selling , operations & other costs flat over 2011-13
Relative higher debt vs
CCL a minor concern w/rising interest ratesSlide7
Good list of large institutional investors – they will likely drive how the stock behaves, no whales or activistsSlide8
Analysts – Close to fully valued, neutral/holdSlide9
Tech Stats
RCL (6 mo view)
Stock price has been parabolic over the last few years and
in recent
few months
Recent (6 mo) trough is ~60 (support), price target is low 90s
Well above
the 50 day moving aver
MFI – 63 and
slight trend up
(
neutral to positive)
MACD – flat (neutral
)
RSI – 67 (70 is overbought)