Key Points:
- Impressive Growth: Since its IPO in May, Viking Holdings (VIK), a luxury cruise operator, has seen its stock soar by +34%.
- Analyst Approved: Viking is in position to benefit from increasing luxury travel among affluent Boomers and Gen Xers.
- Bullish Signals: Hedgeye’s proprietary quantitative signals continue to flash ‘buy,” indicating potential for further gains.
Dear Investor,
Before Viking went public on May 1, 2024, Hedgeye Analyst Sean Jenkins had already spotted its potential, adding it to the long side of his Position Monitor. Following the IPO, stock surged by +34%, and we believe the growth trajectory may continue.
As Jenkins wrote in his pre-IPO report:
"The recovery in luxury cruise demand post-pandemic is robust, with Viking's targeted expansions positioning it well to capture increased market share."
Macro Tailwinds: It’s a Great Market for Viking’s Luxury Cruises
After being one of the slowest to rebound from the pandemic’s impact, the cruise sector has bounced back in a big way.
Boomers and Gen Xers are eagerly returning to the seas, ready to indulge in the opulence that Viking’s cruises offer.
Viking has capitalized on this by maintaining a strong presence in traditional luxury markets like the Mediterranean and the Caribbean. The cruise liner is also expanding into new, lucrative destinations such as the exotic coasts of Southeast Asia and South Pacific islands.
As the rich get richer, Viking is in position to reap the benefits.
Industry Leader in Market Share; Strong Financial Performance
Viking commands a significant portion of the luxury cruise market, holding 26% of passenger volume for luxury ocean cruises and 51% of the European river cruise market.
Beyond meeting high expectations, Viking dazzles its wealthy guests with unique shore excursions and gourmet dining that rivals the world’s top restaurants.
Moreover, Viking has successfully transformed these experiences into revenue and profits. Jenkins notes:
"Viking’s operational strategies have effectively transformed top-line growth into significant profitability, showcasing its financial acumen and operational prowess.”
Hedgeye’s Predictive Signals Are Bullish on Viking (VIK)
Hedgeye’s Founder and CEO Keith McCullough developed a quantitative (buy low, sell high) signaling model during his years as a hedge fund portfolio manager. Keith and our Macro team have refined the algorithm over the years for greater accuracy.
That’s why 81% of Hedgeye’s trade alerts have been winners since January 2022.
Our signal flashed “buy” on VIK on June 17. The stock has risen +13% since then—and remains bullish.
Should you buy Viking (VIK)?
Despite the stock’s fast rise after its IPO, our analysis and signals suggest it’s a smart investment within a well-constructed portfolio that includes a wide range of assets.
Our position sizing recommendation for any long stock position is no more than 3% of your capital.
Get more stock picks from our analysts and Keith McCullough.
Sean Jenkins has identified six stocks in the Gaming, Lodging & Leisure sector that he likes even more than Viking!
If you want daily updates from Jenkins, McCullough, and Hedgeye’s entire stock analyst team, tune in to The Call @ Hedgeye. Join us live each day before the market opens, watch the replay, or read the summary notes.
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The price movements above are calculated based on the difference in the closing price of the stock on July 17, 2024 and the date Sean Jenkins added the stock to his Position Monitor or when Keith McCullough added the stock to our Investing Ideas newsletter. The winning percentage of our trade alerts is based on our timestamped history of closed positions our Real-Time Alerts product. |
