Norwegian Cruise Line (NCLH): Whale Activity & Value Investing Opportunity

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.

Norwegian Cruise Line Holdings Ltd., a Bermuda Limited company, is a leading cruise line operator. It owns and operates three brands — Oceania Cruises, Regent Seven Seas Cruises and Norwegian Cruise Line. The company, founded in 1966, is headquartered in Miami, FL.

NCLH is a Zacks Rank #1 (Strong Buy) stock, with a Value Style Score of A and VGM Score of A. Shares are currently trading at a forward P/E of 10.5X for the current fiscal year compared to the Leisure and Recreation Services industry's P/E of 18.6X. Additionally, NCLH has a PEG Ratio of 0.2 and a Price/Cash Flow ratio of 6.5X. Value investors should also note NCLH's Price/Sales ratio of 0.8X.

Earnings and Valuation Metrics

Many value investors pay close attention to a company's earnings as well. For NCLH, five analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.13 to $1.56 per share for 2024. Per share NCLH boasts an average earnings surprise of 5.7%.

Whale Activity

Whales with a lot of money to spend have taken a noticeably bullish stance on Norwegian Cruise Line. Looking at options history for Norwegian Cruise Line NCLH we detected 8 trades. If we consider the specifics of each trade, it is accurate to state that 62% of the investors opened trades with bullish expectations and 37% with bearish.

From the overall spotted trades, 6 are puts, for a total amount of $278,084 and 2, calls, for a total amount of $80,031. Taking into account the Volume and Open Interest on these contracts, it appears that whales have been targeting a price range from $14.0 to $16.0 for Norwegian Cruise Line over the last 3 months.

Examining the volume and open interest provides crucial insights into stock research. This information is key in gauging liquidity and interest levels for Norwegian Cruise Line's options at certain strike prices. Below, we present a snapshot of the trends in volume and open interest for calls and puts across Norwegian Cruise Line's significant trades, within a strike price range of $14.0 to $16.0, over the past month.

Business Overview

Norwegian Cruise Line is the world's third-largest cruise company by berths (around 66,500). It operates 32 ships across three brands—Norwegian, Oceania, and Regent Seven Seas—offering both freestyle and luxury cruising. The company redeployed its entire fleet as of May 2022. With 13 passenger vessels on order among its brands through 2036, representing 41,000 incremental berths, Norwegian is increasing capacity faster than its peers, expanding its brand globally. Norwegian sails to around 700 global destinations.

Analyst Ratings

5 market experts have recently issued ratings for this stock, with a consensus target price of $21.1.

Conclusion: A Value Stock Worth Considering

Investors should take the time to consider NCLH for their portfolios due to its solid Zacks Ranks, notable earnings and valuation metrics, and impressive Value and VGM Style Scores. The recent whale activity suggests a potential bullish outlook for the stock, adding further weight to its investment appeal. While past performance is not indicative of future results, NCLH's current fundamentals and market sentiment paint a promising picture for value investors seeking growth opportunities in the cruise industry.