Investment Fund Adds $8.6 Million Stake in Norwegian Cruise Line Even as Shares Lag the S&P 500 by 27 Points
Key Points
New York City-based Brigade Capital Management acquired 347,600 shares of NCLH in the third quarter.
The position was worth an estimated $8.56 million as of September 30.
The new holding ranks as the fund’s fourth-largest position as of quarter-end.
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New York City-based Brigade Capital Management disclosed a new stake in Norwegian Cruise Line Holdings Ltd. (NCLH), adding 347,600 shares valued at approximately $8.56 million in its November 14 SEC filing.
What Happened
According to its November 14 SEC filing, Brigade Capital Management initiated a new position in Norwegian Cruise Line Holdings Ltd. (NCLH), acquiring 347,600 shares. The stake is valued at $8.56 million as of September 30, representing a 1.05% allocation of the fund’s $815.2 million in reportable U.S. equity assets and marking its fourth-largest equity holding.
What Else to Know
Top holdings after the filing:
- NYSE:NBR: $30.60 million (28.4% of AUM)
- NYSE:LUMN: $17.75 million (16.5% of AUM)
- NASDAQ:LNTH: $16.23 million (15.0% of AUM)
- NYSE:NCLH: $8.56 million (7.9% of AUM)
- NASDAQ:EXE: $8.34 million (7.7% of AUM)
As of Tuesday, NCLH shares were priced at $23.11, down 12% over the past year and significantly underperforming the S&P 500, which is up about 15% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $9.69 billion |
| Net Income (TTM) | $663.53 million |
| Price (as of Tuesday) | $23.11 |
| One-Year Price Change | (12%) |
Company Snapshot
- Norwegian Cruise Line operates cruise lines under the Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands, offering itineraries ranging from short voyages to 180-day global journeys.
- The company generates revenue across its fleet of 20 ships with tens of thousands of berths.
- It distributes its offerings via travel advisors, onboard cruise sales channels, and specialized channels such as meetings, incentives, and charters.
Norwegian Cruise Line Holdings Ltd. is a leading global cruise operator, leveraging a multi-brand strategy to serve diverse customer segments and travel preferences. The company emphasizes destination variety and premium onboard experiences as key differentiators in the competitive cruise industry.
Foolish Take
Norwegian Cruise Line is coming off a record third quarter, delivering $2.9 billion in revenue (up 5%) and $1.02 billion in adjusted EBITDA (up 9%), both ahead of guidance, while raising full-year adjusted EPS expectations to $2.10. That kind of earnings power helps explain why the stock can lag the S&P 500 over the past year and still attract fresh capital.
The balance sheet remains the key tension. Net leverage ended the quarter at 5.4 times adjusted EBITDA, elevated but moving in the right direction after a series of refinancing transactions that eliminated all secured debt and reduced fully diluted share count by roughly 7.5%. For a fund whose largest holdings skew toward higher-risk, turnaround-style equities rather than index exposure, a cruise operator with improving margins, strong forward bookings, and real cash flow momentum fits the profile.
Norwegian’s multi-brand strategy is also starting to show leverage, with occupancy above 106% and continued strength in luxury demand through Oceania and Regent. This is seemingly less about a perfect macro backdrop and more about whether earnings durability and balance-sheet repair can continue. If they do, today’s volatility may matter far less than it looks.
Glossary
Stake: The ownership interest or investment a person or entity holds in a company.
Assets Under Management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
13F Reportable Assets: U.S. equity securities that institutional investment managers must disclose in quarterly SEC Form 13F filings.
Position: The amount of a particular security or asset held by an investor or fund.
Allocation: The percentage of a portfolio or fund invested in a specific asset, sector, or security.
Quarter End: The last day of a fiscal quarter, used as a reporting reference point.
Holding: A security or asset owned by an investor or fund.
Underperforming: When an investment delivers lower returns compared to a benchmark or peer group.
Berths: The number of beds or sleeping accommodations available on a cruise ship.
Multi-brand Strategy: A business approach where a company operates multiple brands to target different customer segments.
Onboard Sales Channels: Methods of selling products or services directly to customers while they are on a cruise ship.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lantheus. The Motley Fool has a disclosure policy.
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