Former Norwegian Chairman Readies $1 Billion for Condos at Sea
A developer of residential towers in New York, Miami and Los Angeles is embarking on a new venture, with plans to spend more than $1 billion converting cruise ships into luxury condos on the seas.
Russell Galbut, managing principal of developer Crescent Heights, struck a $230 million deal with Norwegian Cruise Line Holdings Ltd. for a long-term lease on his first ship. Galbut said he intends upgrade the vessel, known as the Seven Seas Navigator, and sell berths to customers who'd want to live on the ship for extended periods of time.
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Travel Weekly
5 days ago
- Travel Weekly
Are residential cruises an opportunity for travel advisors?
A small but intriguing part of the cruise business may be set to grow after another residential cruise company has appeared, promising consumers they can buy a cabin and live year-round at sea. Founders of residential lines said they are optimistic about the success of this sector. They point to cruise lines sailing longer world cruises as a trend in their favor. Improvements in high-speed WiFi and consumers' flexibility in working from home are trends supporting this niche product. But some travel advisors said they are hesitant to sell space on residential cruise lines, noting a lack of trade inclusion in the lines' sales strategies and high-profile but troubled product launches. Several residential cruise lines have carved out a space in the industry. Perhaps the best known is The World, a luxury condominium ship that has been in operation for more than 20 years. The newest brand in the market is Crescent Seas, which was founded by former Norwegian Cruise Line Holdings chairman and real estate developer Russell Galbut. He plans for the line to begin sailing in December 2026 on the Seven Seas Navigator, which will be chartered from Regent Seven Seas Cruises and renamed the Crescent Seas Navigator. Crescent plans to expand the fleet a year later by chartering the Oceania Insignia from Oceania Cruises. Both ships will undergo $50 million refurbishments, and three more vessels could be announced over the next five years, Galbut said. Sales for residences on the Navigator, priced from $750,000 to $8 million opened in April. Condos on the Insignia are priced from $650,000 to $10 million, with sales opening this summer. Another line, Villa Vie, uses a former Fred. Olsen ship and offers the opportunity to buy or rent a cabin or buy a seasonal ownership membership. Other brands are in the works, including Storylines, which is building its own ships. Some launches have been messy and failed. In 2023, Life at Sea Cruises canceled its voyage two weeks before embarkation, saying the purchase of a cruise ship fell through shortly before its sail date, according to media reports. Owned cabins were even part of a model for a planned Crystal Cruises ship, but that version of the line ceased operations before the vessel could be built. Carlos Edery, CEO and co-founder of Luxury Cruise Connections based in Miami Beach, said he has noticed a growing interest from affluent clients in living at sea year-round. Nonetheless, he remains wary. "The recent struggles and delays seen with ventures ... have made us cautious about recommending such investments until we see consistent, successful operational execution," he said. In the case of Crescent Seas, travel advisors are built into the sales structure. They can earn a commission when selling a residence or when booking their clients on shorter-term voyages when residents taking a break from the ship opt to make their cabins available to rent. "There's a lot of logic why a travel agent would want to be involved with us," Galbut said, although he declined to share what the commission rate was. Real estate agents, yacht brokers and private bankers could also sell commissionable space on these ships, he said. Alex Sharpe, CEO of Signature Travel Network, said there is a lot to like about the Crescent Seas project, but he stopped short of saying he envisions selling it. "There are certainly earning opportunities, but at the same time, it is not what a typical travel advisor does, so it would likely be more specialized and, for us, will require more research and deliberation," he said. Dennis Nienkerk, a luxury advisor at Dallas-based Strong Travel Services who worked in commercial real estate for more than 25 years, said he knows people who owned condos on the World, and he would welcome the opportunity to sell units on the Navigator. Villa Vie founder and chairman Mikael Petterson said he was looking to better incorporate advisors in his product to sell world cruise segments on the ship. The Villa Vie Odyssey is 74% booked, which leaves room to sell segments to traditional cruisers, he said. Petterson, who was managing director of Life at Sea Cruises, isn't surprised that another residential cruise line has entered the market. If anything, he's surprised there are not more. "World cruises are getting longer and longer," he said. "The option of living onboard with high-speed WiFi, the flexibility of people working from home -- all these factors come together and make residential cruising that much more feasible." That doesn't mean it is easy. Petterson launched the Odyssey from Belfast, Ireland, in September following a four-month delay due to inspection issues associated with the ship, which sat in dry dock before returning to service. Now Petterson is looking for a second ship, and he said he hopes it will come with a smoother launch. Earlier this year, he said he was "knee-deep" in negotiations for a ship currently in operation that contains no more than 600 cabins.
Yahoo
16-05-2025
- Yahoo
Norwegian Cruise Line Holdings' (NYSE:NCLH) Promising Earnings May Rest On Soft Foundations
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) announced strong profits, but the stock was stagnant. Our analysis suggests that this might be because shareholders have noticed some concerning underlying factors. We've discovered 1 warning sign about Norwegian Cruise Line Holdings. View them for free. Norwegian Cruise Line Holdings reported a tax benefit of US$139m, which is well worth noting. It's always a bit noteworthy when a company is paid by the tax man, rather than paying the tax man. We're sure the company was pleased with its tax benefit. However, our data indicates that tax benefits can temporarily boost statutory profit in the year it is booked, but subsequently profit may fall back. In the likely event the tax benefit is not repeated, we'd expect to see its statutory profit levels drop, at least in the absence of strong growth. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. As we have already discussed Norwegian Cruise Line Holdings reported that it received a tax benefit, rather than paying tax, in the last year. Given that sort of benefit is not recurring, a focus on the statutory profit might make the company seem better than it really is. Therefore, it seems possible to us that Norwegian Cruise Line Holdings' true underlying earnings power is actually less than its statutory profit. But the happy news is that, while acknowledging we have to look beyond the statutory numbers, those numbers are still improving, with EPS growing at a very high rate over the last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Norwegian Cruise Line Holdings, and understanding it should be part of your investment process. This note has only looked at a single factor that sheds light on the nature of Norwegian Cruise Line Holdings' profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
10-05-2025
- Yahoo
Norwegian Cruise Line Holdings Ltd. (NCLH): Among Billionaire David E. Shaw's Small-Cap Stock Picks with Huge Upside Potential
We recently published a list of . In this article, we are going to take a look at where Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) stands against other billionaire David E. Shaw's small-cap stock picks with huge upside potential. David E. Shaw is one billionaire investor whose record speaks for itself on Wall Street. Having founded D.E. Shaw & Co., L.P. in 1988 with $28 million in capital, the fund has grown to become one of the most successful and biggest, with a 13F portfolio worth $136.27 billion. Amid the growth, Shaw's hedge fund D E Shaw has also returned significant returns to shareholders. The fund's flagship Composite fund has achieved an annualized net return of 12.7% since inception in 2001, as the Oculus Fund has averaged 13.7% annually since 2004 and has never had a negative year. Shaw's hedge fund was one of the earliest to leverage complex trading algorithms, followed by some form of human-run investing. Consequently, the multi-strategy fund remains the rage on Wall Street, given its solid returns over the years and the growing trend of returning gains to investors. READ ALSO: Billionaire Paul Tudor Jones' 10 Stocks Picks with Huge Upside Potential and Billionaire Quants' Two Sigma's 10 Stock Picks with Huge Upside Potential. Composite hedge fund gained 18% in 2024, with Oculus outperforming the overall market, soaring 36% and recording its best gain since inception. The better-than-expected returns come on Shaw and the other fund managers deploying systematic and computer-driven trading strategies to identify stocks trading at discounted valuations before they explode. Following the impressive performance in 2024, reports emerged that the hedge fund was planning to return billions of dollars to external clients, as has been the trend. Amid the impressive performance last year, D.E. Shaw & Co. finds itself at a crossroads as the overall stock market has turned bearish. Major US indices have pulled back by about 6% from record highs amid recession concerns and deteriorating macroeconomics attributed to the US trade war. The US Federal Reserve holding interest rates unchanged, waiting to see the impact of President Donald Trump's trade policy, continues to rattle sentiments in the equity market. The Federal Reserve held its benchmark rate unchanged at between 4.25% and 4.5%, much to the anguish of Trump. In its statement, the Fed noted the uncertainty around the economic outlook. 'Uncertainty about the economic outlook has increased further,' the statement said. 'The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have raised.' Acknowledging that tariffs could worsen inflation and hinder economic expansion, the statement introduces the likelihood of a stagflation scenario, a phenomenon that has been largely missing from the US economy since the early 1980s. Decision-makers have mostly concurred that the central bank is currently well-placed, as the economy is performing reasonably well at this time, to exercise patience while fine-tuning monetary policy. Amid the economic uncertainty, focus in the equity markets is slowly shifting towards small-cap stocks with significant upside potential. That's partly because large-cap stocks are under pressure after skyrocketing to record highs, resulting in valuations above historical norms. Billionaire David E. Shaw's portfolio boasts of solid small-cap stocks with tremendous upside potential. We combed D. E. Shaw's SEC Q4 2024 13F filings to identify Billionaire David E. Shaw's 10 Small-Cap Stock Picks with Huge Upside Potential. We then settled on stocks with less than $10 billion in market cap and analyzed why the stocks stand out, as solid investments well poised to generate significant long-term value. Finally, we ranked the stocks in ascending order based on the stocks upside potential. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). A luxurious cruise ship overlooking a stunning horizon, highlighting the variety of its itineraries. Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is a cruise company that operates the Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands. Its brands provide accommodations, multiple dining venues, bars and lounges, a spa, a casino, retail shopping areas, and entertainment choices. While the stock is down by about 35% year to date due to weakening cruise demand, it is still one of billionaire David E. Shaw's 10 small-cap stock picks with tremendous upside potential. Despite the lower demand, Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is not planning to offer discounts to attract more ticket sales for its cruises. Instead, it prioritizes strong pricing in anticipation of normalizing demand. Additionally, it is accelerating cost-saving initiatives to maintain profitability. It has already identified about $300 million in potential efficiencies. The Miami-based operator delivered disappointing first-quarter 2025 results as revenues fell 3% year over year on softening demand to $2.13 billion compared to $2.15 billion a year ago. Adjusted earnings per share came in at $0.07, missing estimates of $0.09. Nevertheless, Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) maintained its outlook for 2025, anticipating adjusted EPS of $2.05, increasing about 13% year-over-year. However, on May 1, BofA Securities cut Norwegian Cruise Line Holdings Ltd.'s (NYSE:NCLH) price target from $23.00 to $20.00, keeping a Neutral rating due to declining future bookings, economic uncertainty, and weaker travel demand. Overall, NCLH ranks 6th on our list of billionaire David E. Shaw's small-cap stock picks with huge upside potential. While we acknowledge the potential of NCLH as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NCLH but that trades at less than 5 times its earnings check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. 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