Market watchers are keeping an eye on travel stocks like cruise line operator Royal Caribbean. Hopes are rising that a waning pandemic and pent-up demand will lead to rising travel stocks this year. On Tuesday, Royal Caribbean stock hit an important technical milestone, seeing its Relative Strength (RS) Rating jump into the 80-plus percentile, with an improvement to 81, up a whopping 20 points from 61 the day before.
Top 19 Percenter
The upwardly revised 81 RS Rating puts Miami-based Royal Caribbean stock in the top 19% of all stocks in IBD's database. That's notable because research shows that the market's biggest winners tend to have an 80 or higher RS Rating in the early stages of their moves.
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Royal Caribbean stock is building a consolidation pattern. On Tuesday, the cruise lines company — which operates under its namesake as well as Celebrity Cruises and Azamara Club/Silversea Cruises — traded around 49, down about 1.5%. The cruise line operator bottomed at 31.08 in mid-July and has lurched higher since then, not yet building a base with a buy point.
Among its other key ratings, Royal Caribbean stock has a mediocre 74 Composite Rating. And its 68 Earnings Per Share Rating reflects profit declines in past quarters, although it improved significantly last quarter. The standout rating is its B- Accumulation/Distribution Rating. That shows that institutional investors like mutual funds are fairly heavy buyers, a bullish indicator.
555% Sales Hike Vs. Last Year
Royal Caribbean reported a 26-cents per share profit last quarter, reversing strongly from a $4.91 loss the same quarter a year ago. Sales soared 555% in its latest quarter, to $2.993 billion. The next quarterly results are expected on or around Jan. 26.
Royal Caribbean stock earns the No. 12 rank among its peers in the Leisure-Services industry group. Warner Music Group and Xponential Fitness are also among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength. IBD's proprietary RS Rating measures technical performance by showing how a stock's price action over the last 52 weeks measures up against that of other stocks on the major indexes.
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