I've mentioned here before my deep love of travel, so it's no
surprise that I've got big plans for my honeymoon, happening
later this year. My fiancé and I discussed many possibilities:
Australia (possibly too far), Costa Rica (not the right time of
year), Hawaii (might do that as a vacation with our families at
some point), and the list goes on.
We finally decided we'd like to go to Europe, as we both love it
and have barely scratched the surface of what's to see there.
When we finally narrowed down which country we'd like to go to,
we settled on France. What could be better than good wine, good
food and good company?
All this thinking about travel has, naturally, got me thinking
about travel stocks. So I scoured the Cabot newsletters to see
which ones have been popping up lately and found a few
interesting ones recommended by Editor Michael Cintolo in Cabot
Top Ten Weekly.
First up is
Royal Caribbean (
, which Mike recently featured …
"Royal Caribbean first popped up in Cabot Top Ten Weekly last
October, then in November. And now this cruise company, whose
brands include Royal Caribbean International, Celebrity Cruises,
Pullmantur Cruises, Azamara Club Cruises and CDF Croisieres de
France, is back again as investors continue to like the story of
a recovering global economy and an aging population that's
favorably disposed toward onboard vacations. A little over half
(54%) of Royal Caribbean's 2009 revenues were from U.S. ticket
sales, and the company gets nearly 30% of revenue from onboard
sales and services. An aggressive program of cost controls
yielded a strong 53% jump in earnings on just a 17% gain in
revenues in Q3, and Q4 results, which are scheduled for 10:00 am
Eastern on this Thursday (January 27) are widely expected to beat
analysts' estimates. Some of that expectation is already priced
in, but a good result should still boost the stock."
"RCL has gone through some significant corrections during its
rise from 5 in early 2009 to near 50 in recent trading, but the
tendency is clearly up. After popping up to its recent high on
January 15, RCL has corrected to its rising 25-day moving average
just above 47. It's likely that the stock will trade sideways
until earnings are out. A small buy, with a tight stop at the
50-day moving average (now at 44.5) should do well."
As Mike mentioned, Royal Caribbean reported earnings last night.
The company beat Wall Street forecasts for the most recent
quarter with Q4 profits of $42.7 million, or 20 cents per share,
handily beating views of $26.9 million, or 13 cents per share,
and well above last year's $3.4 million, or 2 cents per share.
Revenue rose 10% over last year to $1.6 billion. But Royal
Caribbean's outlook disappointed investors, sending the stock
lower. So watch this one closely before jumping in.
And now for an old favorite,
, which has been featured in Cabot Wealth Advisory many times.
This is what Mike wrote about Princeline in Cabot Top Ten Weekly
in mid-November …
"Priceline.com remains one of the handful of liquid (i.e., very
well-traded and institutionally owned) leaders of this bull move,
and the reason is obvious-business is very good and continually
outpaces even the most bullish forecasts. Last week, the company
continued that trend by putting up another round of outstanding
numbers, and the under-the-hood metrics were also
impressive-gross travel bookings leaped 47% from the prior year,
international revenues surged 67%, hotel bookings leaped 54% and
the firm's newly acquired rental car unit sales nearly doubled!
Domestically, growth is slower but steady, and management has
been pushing all the right buttons in positioning its brand
around the world. Analysts significantly hiked their outlooks
following the earnings report (next year's earnings estimate is
now $17.53 per share, up from $15.45 one month ago), which would
mark a healthy 33% hike from 2010. We like it.
"PCLN hasn't gotten many headlines and the stock isn't the
hottest thing on the planet. Nevertheless, shares remain in a
firm uptrend, and as you see on this weekly chart, have barely
had any hiccups since the summer. Last week's earnings gap was
solid-shares rose 8% on nearly triple average volume-but not so
powerful that we think it'll be all up from here for PCLN. A
pullback of a few percent is possible, and would be buyable if it
After the write-up, PCLN meandered for nearly two months before
taking off on big volume at the beginning of January. Earnings
are out in mid-February, so watch closely to see how the stock
Last, but certainly not least is
, which recently appeared in Cabot Top Ten Weekly …
"Americans love the open road and as the leading maker of motor
homes with over 18% market share, Winnebago is synonymous with
seeing the sites in style. Motor homes aren't cheap, rivaling the
cost of real homes in some cases, so the recession hurt 2009
results as consumers hesitated on big purchases. But motor homes
are now seeing resurgent interest, so the rebound of sales in
2010 to $450 million from $212 million in 2009 was no fluke. That
also means dealers have worked through the inventory they sat on
and now need new homes to showcase on their lots. Inventory was
still near historic lows last year at 2,044 homes, well below the
3,500-plus that was typical during the past decade. Expectations
are also rising because Baby Boomers are projected to be
significant motor home buyers as they enter retirement. On top of
that, existing owners tend to trade in or up to a new motor home
every five to seven years, meaning buyers from the industry's
sales peak of 2004 are now kicking the tires on possible
"Buyers piled into WGO in mid-December as the company announced
profit that topped Wall Street expectations and gave indications
dealers were optimistic enough to start stocking more motor homes
on their lots. The surge, from 10 to 15, broke shares out of
trading range without drawing in much selling. The next level to
break is 17; shares appear to be consolidating for a run there
soon. Long-term, shares tend to be more volatile, trading in
response to broader economic conditions that imply consumer
discretionary spending may be rising or slowing."
Mike recommends buying WGO between 14 and 16 to minimize risk, so
keep that in mind if you take a position.
For more on RCL, PCLN, WGO and other leading stocks, check out
Cabot Top Ten Weekly
, where Mike Cintolo brings you the market's hottest stocks each
and every week.
In this week's Stock Market Analysis Video, Cabot China &
Emerging Markets Report Editor Paul Goodwin says that it's been a
good week in the market, as the S&P 500 remains in an
uptrend. Where it starts to get interesting, he says, is when you
look at some of the individual stocks. Stocks discussed include
F5 Networks (
), Acme Packet (
), AmBev (ABV), Netflix (NFLX), Under Armour (UA)
Intuitive Surgical (ISRG)
Click to watch.
--- Advertisement ---
Diversify for Less Than 13 Cents Per Day …
That's how little it costs to get the best stock across all
sectors. If you want to diversify your portfolio and profit from
using several different investing philosophies to pick winning
stocks, Cabot Stock of the Month is right for you.
Not only is it priced so low that every investor can afford it,
it's also designed so that subscribers get a taste of a multitude
of investing styles. The price is so low, you'll recover it from
your very first profitable investment.
Click to get started today!
Until next time,
Editor of Cabot Wealth Advisory