It's been a Dramamine-popping crazy few months for Norwegian Cruise Line Holdings (NCLH) shareholders, but things weren't always this volatile. The country's third-largest cruise line has historically been a steady performer since going public in 2013.
Eight years later, what do the earliest of Norwegian Cruise Line investors have to show for it? You're probably not going to like the answer, but let's walk the gangway to see where it all started for the cruise line operator.
Norwegian Cruise Line went public at $19 on Jan. 18, 2013. It was a generally well-received but modest debut. The shares opened at $25.10, meandering around that level to close its first day of trading at $24.79.
A 30% gain out of the port isn't a bad haul. The stock moved higher in each of its first three years of trading. Norwegian Cruise Line shares peaked in the mid-$60s near the end of 2015. It was close to getting back to its all-time highs early last year, but that's when the coronavirus cloud crashed the cruise party.
Norwegian Cruise Line and its rivals suspended voyages in March of last year. A few notable COVID-19 outbreaks on some of the industry's ships had investors heading to the lifeboats when it came to cruise stock investing. There won't be any Norwegian Cruise Line trip until April at the earliest.
All three of the country's largest cruise line stocks have been rocked in the process. Norwegian Cruise Line has surrendered more than half of its value since the beginning of 2020, fetching $24.66 as of Thursday's close.
The math is cruel for buy-and-hold investors who got in on the Norwegian Cruise Line IPO. The stock has risen less than 30% in what will be exactly eight years next week. Laying $1,000 at the IPO price would be worth $1,298 as of Thursday's close. Sure, it's a gain, but it translates into an annualized return of just 3.3%. Unlike its two larger rivals, which paid dividends until suspending the payouts early last year, Norwegian Cruise Line has never instituted a distribution policy. There is no dividend income to consider here. The capital gain is all there is, and a nearly 30% gain in eight years isn't much.
Obviously, the return is far worse if you bought at its all-time high in 2015, or when it was starting to get back to those high waves in January of last year. The only investors who aren't feeling too bad are those who managed to pick up some shares when things were at their bleakest in the springtime of last year, when Norwegian Cruise Line stock was in the single digits. Right now, there are just as many uncertainties. A resumption of travel is still months away, and Norwegian Cruise Line Holdings is still burning through roughly $160 million every month that it's not entertaining paying passengers.
The stock may have had a ho-hum return over the past eight years, but the chart is as choppy as sailing during a storm. Norwegian Cruise Line turning $1,000 to $1,298 in eight years isn't much of a magic trick, but at least it's not a disappearing act for now.