Cruise Stocks Have Sunk. Only Two Have Seen Large Insider Buys.

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All three cruise-line operators are pretty much in the same boat this year, losing double-digit percentages in market values. But only two have seen purchases by company insiders.

Carnival

(ticker: CCL),

Royal Caribbean

(RCL), and

Norwegian Cruise Line Holdings

(NCLH) have seen shares take on water year to date, falling 31%, 24%, and 22%, respectively. For comparison, the

S&P 500 index

has slipped 13% so far this year.

We noted in April that the pandemic has hit cruise lines harder than nearly any other sector, but there are signs of a comeback. There has been a raft of company-specific news, lately, as well.Carnival CEO Arnold Donald is stepping down in August after nearly a decade at the helm. New Royal Caribbean CEO Jason Liberty, who took the wheel in January, told us earlier this month: “For the most part, the U.S. consumer and the European consumer have regained their momentum since the beginning of the war in Ukraine.” Also this month, Norwegian reported a wider-than-expected first-quarter loss, but investors were heartened to hear that bookings were strong.

As noted, though, among the cruise lines, only one insider at Norwegian—the smallest of the three by market value—has bought stock this year.

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Norwegian Chairman Russell W. Galbut paid $1.5 million on May 23 for 100,000 shares, an average price of $15.13 each, according to a form he filed with the Securities and Exchange Commission. He purchased the stock through a partnership that now owns 489,917 Norwegian shares, and Galbut owns another 66,403 shares in a personal account.

Real estate firm Crescent Heights, which Galbut serves as managing principal, didn’t respond to a request to make him available for comment.

Carnival director Randall Weisenburger paid $1.2 million on May 25 for 100,000 shares, an average price of $11.76 each. He now owns 870,950 Carnival shares.

It’s Weisenburger’s first purchase of Carnival stock since April 2020, when he bought $10 million of the shares. He’s been a Carnival director since 2009, and has been managing member of private-investment firm Mile 26 Capital LLC since 2014.

Carnival didn’t respond to a request to make Weisenburger available for comment.

On May 19, Truist analyst C. Patrick Scholes cut his price targets on Carnival, Royal Caribbean, and Norwegian to $15, $65, and $18, respectively, from $17, $70, and $20, respectively.

“While 2023 pricing is holding for now as it is still seven months out from the first 2023 departures, 2023 cumulative booking pace continues to decelerate and is significantly below comparable 2019 levels,” Scholes wrote.

The analyst rates Carnival at Sell, and has Hold ratings on Royal Caribbean and Norwegian.

Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

Write to Ed Lin at [email protected] and follow @BarronsEdLin.