Equity investors have certainly experienced volatility this year. There have been wild swings, but the S&P 500 index has returned -0.1% through April 10.
While investors should always think long-term, it's particularly important to do so now. If you sell in a panic, you'll likely regret it down the line.
But it's also important to focus on buying companies with strong long-term growth prospects. And if you can purchase it at a bargain, so much the better.
Fortunately, you don't need to be a millionaire to invest. Here's the value stock I'd buy now with $1,000.
Image source: Getty Images.
Potential headwinds
Royal Caribbean Cruises (RCL +1.04%) has three main cruise brands. Its namesake appeals to families and the premium segment, while Celebrity Cruises targets the premium market. The Silversea brand offers ultra luxury on smaller ships.
Bookings have been strong, and passengers seem to like Royal Caribbean's offerings and experiences. Its occupancy, which is based on two people per room, was 109.7% last year, up from 108.5% the previous year. No wonder the company has been adding capacity.
It produced solid revenue growth last year. The company's 2025 revenue increased 8.7%, after excluding foreign-currency translations, to $17.9 billion.
Of course, investors have become concerned about future results. In particular, fuel costs account for a significant portion of Royal Caribbean's cruise operating expenses, and oil prices have spiked with the onset of the Iran war. Still, management had 60% of its fuel costs hedged in late January, helping mitigate the short-term impact.
Then, there's angst over the overall economy. Naturally, people will book fewer expensive cruises during an economic downturn.
These are short-term effects, however. The long-term picture, as its bookings indicate, appears bright.
Riding the waves
The stock price has dropped 0.7% this year. It has performed worse than the S&P 500.
NYSE: RCL
Key Data Points
But it seems investors focused on short-term headwinds rather than the strong demand for its cruises. Although a slumping economy may hurt short-term results, I have no doubt people will once again book Royal Caribbean cruises once things improve.
Meanwhile, the stock trades at a better valuation, based on the price-to-earnings (P/E) ratio. The shares have a P/E ratio of 18 compared to 22 earlier this year.
Royal Caribbean's shares also trade at a much lower multiple than the stock market. The S&P 500 has a P/E ratio of 29.
The attractive valuation, combined with bright growth prospects, makes Royal Caribbean shares stand out. That's why the stock tops my list among value stocks.
