This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Cash-Burning Stocks to Extinguish From Your Portfolio

Royal Caribbean Cruises

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

2012 has been a year of rough seas for Royal Caribbean Cruises (RCL). Shares of the $6.5 billion cruise line shares have bounced between substantial gains to substantial losses several times over the course of the year.

And while shares currently sit on the upper end of the stock's range as we enter the fall, investors need to be aware of some less attractive attributes in this stock. RCL's cash reserves have been more than cut in half in the last year, down to 212.2 million.

>>5 Consumer Stocks Hedge Funds Love

Royal Caribbean's No. 2 spot in the cruise industry is enviable, and so is the firm's lineup of brands. Besides its namesake line, Royal Caribbean also owns Celebrity Cruises and a handful of regional operators in Europe. But that positioning doesn't change the fact that RCL operates in a capital intense business with inconsistent margins and huge exposure to commodity prices. In the latest quarter, RCL only earned 9% more than its interest expenses before taxes. That's not a great sign.

Let's face it: Cruising is a business that's driven by consumer discretionary spending. With consumers still keeping a tight handle on their purse strings in 2012, RCL's cash burn isn't likely to abate in the near-term. The firm's balance sheet is already taxed. Don't get caught waiting for RCL to raise capital before selling.

2 of 6

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,951.21 -132.59 -0.78%
S&P 500 1,979.21 -8.77 -0.44%
NASDAQ 4,447.3880 -24.72 -0.55%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs