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VIDEOTicker Shock: Three Reasons to Cruise With Royal Caribbean Stock
Tuesday's top stories and stocks with potential to move.
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Yesterday I mentioned that I came home from my vacation with a pretty nasty sunburn. I dutifully applied a ridiculous amount of high-SPF sunblock everyday. So my question is, how is it I look like a giant lobster?
Sweet comeback in the last hour or so yesterday. Let’s just hope some of that momentum spills over into today’s session.
Asian stocks ended up lower. The Hang Seng was off 1.07% and the Nikkei was down 0.8%. Meanwhile, European stocks were a bit of a mixed bag earlier this morning. And here in the US, we're currently trading lower.
Royal Caribbean (RCL): 
According to a release earlier this morning
“Royal Caribbean Cruises Ltd. today announced an estimated financial impact of approximately $(0.22) per share, directly attributable to the impact from the H1N1 virus. For Royal Caribbean International, this is the result of vessels that deviated their itineraries away from Mexican ports and ensuing pricing pressures in the Mexican market.”
Clearly not a big positive, and I suppose shareholders aren’t jumping for joy. But I want to point out that it doesn’t destroy my opinion that cruise companies are a good bet, long haul.
1. Cruises can be a cost-effective way to travel, compared to booking pricey airfare and high-priced hotels and entertainment separately and on your own.
2. You can visit lots of destinations on one trip, depending on the cruise.
3. Royal Caribbean is currently expected to earn $1.18 this year and $1.27 next (but that could get ratcheted down a bit). Carnival (CCL) -- another great company -- is expected to earn $2.13 a share this year and $2.14 next. Not bad.
When it comes to travel, I’d much rather bet on these guys than the major or regional airlines. Yuck!
Texas Instruments (TXN): Some good news for the high-profile Dallas, Texas-based chip company. Last night after the close, it disseminated a release that outlined expectations for its second quarter.
The 2 lines in the release that caught my eye:
“Revenue: $2.30 - $2.50 billion, compared with the prior range of $1.95 - $2.40 billion," and “EPS: $0.14 - $0.22, compared with the prior range of $0.01 - $0.15.”
Some thoughts:
1. Get out the toolbox because the Street will have to ratchet up its estimates. It's at $0.10 and expecting a smidge over $2.2 billion on the revenue line.
2. This could be a nice trade or entry point for the long haul.
3. It's not what I'd call rock-bottom cheap. Although I have this sense that the 2010 estimate of $0.92 could eventually get a goose, it trades at about 21.5 times that estimate.
4. Will this buoy all of tech in today’s session? I’m not sure, but I think not.
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