By all accounts, 2020 hasn’t been a great year for Norwegian Cruise Line (NYSE:NCLH). The onset of the novel coronavirus has kept many people away from cruise lines. As a result, the NCLH stock price has declined sharply and has a lot of catching up to do.
Usually, people think of biotechnology companies when they hear the term “vaccine stock.” Yet, for all intents and purposes, we can include NCLH stock in the category of vaccine stocks.
After all, it will be much easier to convince vacationers to board a cruise ship after an effective Covid-19 vaccine has been discovered and delivered to the public.
Is a vaccine discovery the be-all and the end-all for NCLH stock holders? Not necessarily, but it will certainly clear the runway for higher share prices. And thankfully, in early to mid November, there’s potentially good news on the vaccine front.
A Closer Look at NCLH Stock
There’s a great deal of excitement in the air during the premarket hours of Nov. 9. Many stocks are pointing to a higher open. Among them is NCLH stock, which is up by around 28%.
It’s quite a drastic change in sentiment and price as NCLH stock closed below $17 on Nov. 6 but is set to open at around $22 on Nov. 9. This ought to give the bulls a much-needed shot in the arm.
Prior to the coronavirus crisis, NCLH stock sat comfortably between $55 and $60. Therefore, there’s room for the share price to grow even after a 28% gain.
Hopefully, this isn’t just a head-fake like we witnessed in early June, when NCLH stock popped to the $27 area. That spike was followed by a quick and persistent share-price decline. Thus, the bulls need to show some follow-through this time around.
Why People Are Celebrating
The billion-dollar question, naturally, is about why the market is so euphoric and what could possibly have propelled NCLH stock so quickly to $22.
As we discussed, NCLH is effectively a vaccine stock. So, any positive news about Covid-19 vaccines ought to have a positive impact on the NCLH share price.
And so, the market cheered and NCLH rocketed upwards as drugmakers Pfizer (NYSE:PFE) and Germany-based BioNTech SE (NASDAQ:BNTX) announced “success” in the first interim analysis from a Phase 3 study of their Covid-19 vaccine candidate, BNT162b2.
Reportedly, the analysis found BNT162b2 to be more than 90% effective in preventing Covid-19 in clinical-trial participants who did not exhibit prior evidence of SARS-CoV-2 infection.
After the required safety milestones have been met, the next likely step would be for Pfizer and/or BioNTech SE to submit BNT162b2 to the U.S. Food and Drug Administration (FDA) for Emergency Use Authorization (EUA). This could take place as soon as the third week of November.
A Great Day
Pfizer Chief Executive Albert Bourla commented, “Today is a great day for science and humanity.” But is it a great day for prospective NCLH stock investors, as well?
If you already owned the shares, the price surge would undoubtedly be a reason to celebrate. On the other hand, if you didn’t already own NCLH stock, now there’s a big decision to make.
Does it make sense to buy a stock after a massive single-session run-up? Usually, I would just stay out of the way and wait for a pullback. However, in the case of NCLH stock, I feel that it’s perfectly fine to start accumulating the shares.
The NCLH share price is still far below its pre-pandemic range. If your strategy is to buy low and sell high, then NCLH stock is still fairly low. Wishing that you had bought the stock at $15 or $17 isn’t going to do you any good at this point.
The Bottom Line
Instead of feeling regret if you didn’t already own NCLH stock, just congratulate the folks who had the foresight to buy NCLH when the overall sentiment was at its lowest point.
Then, feel free to take a long position in anticipation of further progress from the drugmakers that are fighting the good fight.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
