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In this article, I will feature one cruise company that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

Royal Caribbean Cruises (NYSE:RCL) operates as a cruise company worldwide.

(click to enlarge)

Insider selling during the last 30 days

Here is a table of Royal Caribbean's insider-trading activity during the last 30 days by insider.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Bernt ReitanDirectorFeb 710,014No28,452 shares26.0%
Michael BayleyPres, CEO, Celebrity CruisesFeb 411,006No38,773 shares + 12,843 options17.6%
Gonzalo Chico BarbierPresident & CEO, Pullmantur SAJan 2911,635No65,648 shares15.1%

There have been 32,655 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Royal Caribbean's insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
February 201421,0200
January 201411,6350
December 201300
November 201315,7290
October 201370,9230
September 201347,3630
August 201332,0200
July 201345,35026,800
June 201300
May 20135,5000
April 201331,2740
March 201327,1340
February 201314,1610
January 201300

There have been 322,109 shares sold, and there have been 26,800 shares purchased by insiders since January 2013.

Financials

Royal Caribbean reported the full-year 2013 financial results on January 27 with the following highlights:

Revenue$8.0 billion
Net income$473.7 million
Cash$204.7 million
Debt$8.1 billion

Outlook

Royal Caribbean's adjusted EPS for 2014 is expected to be in the range of $3.20 to $3.40 per share.

(Source: Earnings presentation)

Royal Caribbean's adjusted EPS for the first quarter is expected to be in the range of $0.20 to $0.30 per share.

(Source: Earnings presentation)

Competition

Royal Caribbean's competitors include Carnival Corporation (NYSE:CCL), and Norwegian Cruise Line Holdings (NASDAQ:NCLH). Here is a table comparing these companies.

CompanyRCLCCLNCLH
Market Cap:11.24B31.09B7.27B
Employees:N/A92,70013,800
Qtrly Rev Growth (yoy):0.030.020.18
Revenue:7.96B15.46B2.47B
Gross Margin:0.330.320.36
EBITDA:1.61B3.16B619.46M
Operating Margin:0.110.100.16
Net Income:473.69M1.08B66.68M
EPS:2.141.390.33
P/E:23.8328.83106.31
PEG (5 yr expected):0.801.400.63
P/S:1.402.002.92

Norwegian Cruise Line Holdings has the fastest revenue growth among these three companies.

Here is a table of these competitors' insider-trading activities during the last 12 months.

CompanyInsider buying / sharesInsider selling / shares
CCL40,000269,738
NCLHN/AN/A

Carnival has also seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Royal Caribbean, and there have not been any insiders buying Royal Caribbean during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Royal Caribbean has an insider ownership of 1.40%.

Before going short Royal Caribbean, I would like to get a bearish confirmation from the Point and Figure chart. The main reason for the proposed short entry is the intensive insider-selling activity.

Source: Royal Caribbean: 3 Different Insiders Have Sold Shares This Year