- Royal Caribbean moved 4% upstream for the week. The cruise line moved higher despite having to remove two young passengers who tested positive for COVID-19 along with their families on the first test cruise of its Adventure of the Seas ship.
- Steelcase moved 9% higher. The office furniture specialist moved higher after posting better-than-expected quarterly results.
- Finally we have Osprey Bitcoin Trust slipping 6%. The crypto market continues to correct, and the single-asset trust continues to trade at a steep premium to its net assets.
The three stocks averaged a 2.3% increase for the week. The S&P 500 rose 2.7%, so I actually won this week. Right now, I see Norwegian Cruise Line (NYSE:NCLH), Walgreens Boots Alliance (NASDAQ:WBA), and Osprey Bitcoin Trust as vulnerable investments in the near term. Here's why I think these are three stocks to avoid this week.
1. Norwegian Cruise Line
Last week's costly extraction of a pair of passengers with the COVID-19 virus should be concerning to folks who want to start sailing again. Having unvaccinated passengers hitting exotic ports-of-call in impoverished islands that are not as far along in the recovery cycle is going to make for a long recovery.
Norwegian Cruise Line is the smallest of the three major cruise line operators, and it's also the most susceptible to any future setbacks. With the cruise line stocks already commanding pre-pandemic enterprise values, there isn't a lot of upside if things go right -- and plenty of downside if things go wrong.
2. Walgreens Boots Alliance
There aren't a lot of companies stepping up with fresh quarterly results this week. One that stands out as potentially problematic is Walgreens Boots Alliance. The drugstore chain and provider of pharmacy services reports on Thursday morning.
Analysts aren't holding out for much. They see $33.76 billion in revenue for the fiscal third quarter, a 3% decline over the past year. Wall Street pros are holding out for a profit of $1.17 a share, but that's exactly what they were forecasting for last year's fiscal third quarter. Walgreens wound up earning just $0.71 a share. That was a crazy quarter in the wake of the pandemic, but Walgreens Boots Alliance has fallen short of analyst profit targets in two of the past four quarters.
It's also not a good sign that drugstore rival Rite Aid (NYSE:RAD) plummeted 19% last week after posting disappointing quarterly results. Rite Aid -- which sold a bunch of its stores to Walgreens three years ago -- topped expectations, but its guidance proved to be problematic. Walgreens Boots Alliance has a lot to prove this week.
3. Osprey Bitcoin Trust
You should never pay more than you have to for something, and that's my beef with Osprey Bitcoin Trust, a small exchange-traded trust that owns nothing but Bitcoin (CRYPTO:BTC). Crypto has been falling out of favor in recent weeks, but Osprey Bitcoin Trust hasn't tumbled as hard.
Over the past three weeks we've seen Osprey Bitcoin Trust's premium increase from 12% to 18% to 26% to what is now 30%. Osprey Bitcoin Trust closed at $14.22 last week. It only owns $10.97 a share in Bitcoin. If your risk profile is open to diversifying into crypto nearly every other outlet will be cheaper for you than this.
If you're looking for safe stocks, you aren't likely to find them in Norwegian Cruise Line, Walgreens Boots Alliance, and Osprey Bitcoin Trust this week.