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When Will Norwegian Finally Be A Buy?

Aug. 29, 2016 2:04 AM ETNCLH3 Comments
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Norweigian Cruise Line has underperformed both the market and its competiors Carnival and Royal Carribean as of recent. The idea of Zika and terroisim inclining the average person to travel less.

"In the short run, the market is a voting machine but in the long run, it is a weighing machine."

The greatest quote of all time.

So when will Norwegian finally be a BUY? It was trading at $62 not even 1 year ago. After the company revised earnings to be lower, today the foward P/E still trades at 8.62. In todays market people are seeking yields more than ever while interest rates remain low, making this stock even more undervalued. Growth stocks are becoming more in favor and I beleive a black swan can change at any moment. Therefore $33 is the price I have set, and will pile on long if and when it hits.

People are growing old all around the world. As this trend undeniably continues the demand for cruising will too. What sets Norweigian apart from its competiors is the quality of the ships and the upscale feel it brings along with it, allowing Norweigian to charge more. As they continue to grow one major catalyst will be China. The Japanese have already proved they love cruising. While the population of China is so large, Norwegian just needs to pentrate a very small percentage to find rapid growth. Relaizing the potential, they have planned setting sail Summer of 2017, the Norwegian Joy will be soley for the Chinese market and is designed with a custom style and feel for the people of China.

Now lets get into the fundamentals a bit more.

Trailing P/E: 16

PEG: .53

While price to book and price to sales both remain under 2.

The RSI is showing oversold levels and with strong future growth, I beleive Norweigian will easily be able to pay of all their debt. Espicially with the back of Apollo and Genting.

Cheers! and keep this one on your radar guys.

Analyst's Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in NCLH over the next 72 hours.

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