Strong On High Volume: Royal Caribbean Cruises (RCL)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Royal Caribbean Cruises ( RCL) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Royal Caribbean Cruises as such a stock due to the following factors:

  • RCL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $108.3 million.
  • RCL has traded 485,422 shares today.
  • RCL is trading at 3.15 times the normal volume for the stock at this time of day.
  • RCL is trading at a new high 6.01% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on RCL:

Royal Caribbean Cruises, Ltd. operates as a cruise company worldwide. It owns six cruise brands comprising Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, CDF Croisieres de France, and TUI Cruises. The stock currently has a dividend yield of 1.7%. RCL has a PE ratio of 24.1. Currently there are 10 analysts that rate Royal Caribbean Cruises a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Royal Caribbean Cruises has been 2.5 million shares per day over the past 30 days. Royal Caribbean Cruises has a market cap of $15.9 billion and is part of the services sector and leisure industry. The stock has a beta of 1.34 and a short float of 3.1% with 4.51 days to cover. Shares are up 49.4% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Royal Caribbean Cruises as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.6%. Since the same quarter one year prior, revenues slightly increased by 3.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 32.72% and other important driving factors, this stock has surged by 64.54% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • ROYAL CARIBBEAN CRUISES LTD has improved earnings per share by 32.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ROYAL CARIBBEAN CRUISES LTD increased its bottom line by earning $2.14 versus $0.07 in the prior year. This year, the market expects an improvement in earnings ($3.47 versus $2.14).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Hotels, Restaurants & Leisure industry average. The net income increased by 34.0% when compared to the same quarter one year prior, rising from $365.70 million to $490.25 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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