LEISURE LETTER (6/4/2015)

TICKERS: G13.SI, RCL

EVENTS

  • June 4: CCL special press announcement in NYC

COMPANY NEWS  

G13.SI- Genting Singapore bought back 136,500 shares at 90.5 Singapore cents each on Tuesday and another 2 million shares Wednesday at 91 Singapore cents per share. 

 

RCL - The upcoming dry docks for Azamara Club Cruise's two ships, Journey and Quest, will result in significant changes to the two upscale vessels. "From bow to stern, and stern to bow, there is no area on the line's ships that will be untouched," Azamara CEO Larry Pimentel said.

 

The refurbishment of the 15-year-old ships - both former R-class vessels, so named because they were acquired from Renaissance Cruises - will take place in 2016.  Azamara Journey will enter dry dock in January 2016 in the Bahamas and Azamara Quest will receive the changes during an April 2016 dry dock in Singapore.

Takeaway: Much needed makeover for Azamara.

 

INDUSTRY NEWS 

 

Junket smoking area request rejected - Secretary for Economy and Finance, Lionel Leong, dismissed requests from Macau's junket association for smoking rooms in VIP gaming areas. This rejection comes shortly after secretary Alexis Tam also asserted his position against the request in a meeting with the group three days ago.

 

MGM China CEO Grant Bowie also called for casinos to be able to retain smoking lounges. While the company supports the ban, the customers’ interests also have to be taken into account, he was cited as saying by TDM Macau. “We clearly support the initiatives of the government in terms of protecting the interest of the staff, and therefore, have supported the banning of smoking on the gaming floor but we would also suggest that we should allow people to smoke in smoking lounges,” he said.

ARTICLE HERE

Takeaway: Full smoking ban is an inevitability 

 

China river tragedy - Major travel agencies, when contacted, said there have been no trip cancellations yet as of Tuesday. 

 

"It is an exceptional case," said Zhou Yingfeng, product manager at China Youth Travel Service Shanghai. Zhou said the travel agency had no customers on the boat and it has not yet received any notices of cruise cancellations on the Yangtze River after the accident.

ARTICLE HERE

Takeaway: Damage control by the river cruises following incident. Given media coverage, the sentiment could be negative towards any cruising in China. 

 

Yellow Brick Road Casino - had a grand opening on June 2nd. The casino near Schenectady, NY has 430 slots. 

MACRO

Hedgeye Macro Team remains negative on Europe, their bottom-up, qualitative analysis (Growth/Inflation/Policy framework) indicates that the Eurozone is setting up to enter the ugly Quad4 in Q4 (equating to growth decelerates and inflation decelerates) = Europe Slowing.

Takeaway:  European pricing has been a tailwind for CCL and RCL but a negative pivot here looks increasingly likely in 2015.


7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more