RCL, NCHL, CCL, LIND (CRUISE LINES)

[Gregmal]

Yea we were talking about debt levels in the other thread and these are 100% an example of that but in a bad way. All the EV has been shifted to the debt. Dilution galore. Already capital intensive.
 

The bull argument probably hinges on another market contradiction. The economy is too hot right? That’s the whole problem I suppose. So if that persists, they probably earn quite a bit more than what is currently in the share price.

 

For me, these aren’t businesses I wanna hang around and find out whether the Fed actually destroys the economy with.

[KPO]

1 hour ago, Gregmal said:

Yea we were talking about debt levels in the other thread and these are 100% an example of that but in a bad way. All the EV has been shifted to the debt. Dilution galore. Already capital intensive.
 

The bull argument probably hinges on another market contradiction. The economy is too hot right? That’s the whole problem I suppose. So if that persists, they probably earn quite a bit more than what is currently in the share price.

 

For me, these aren’t businesses I wanna hang around and find out whether the Fed actually destroys the economy with.

Agreed. The product offers a lot of value, but the debt taken on as a result of Covid seems to me that it might require a run through bankruptcy for two of the three largest competitors. It’s possible the reorganized balance sheets of the two I see going through bankruptcy drags the third down due to an inability to be price competitive with reorganized competition. I may be wrong, but the scenarios I’ve run on the big three isn’t pretty. After looking at these I pivoted to another Covid impacted sector that’s a duopoly, the large passenger aircraft manufacturers. This seems a better bet to me. 

[Lazarus]

Thanks for the replies. I was initially thinking there might be room for one bankruptcy / restructuring, which could cause panic and huge drop in the shares of the others to allow investors to scoop up shares on the cheap, not multiple! Sounds like general consensus is that there is a lot more pain on the way for this sector.