This Stock is Too Cheap to Pass Up

I recently found myself sitting in the warm Texas sun with a few beers, some of the best barbecue in Dallas and friends visiting from all over -- Australia, Zimbabwe, South Africa and a few from the States.

Two topics kept coming up in our conversation: travel and the global economy. All of these friends travel the world regularly, and nearly all happen to be in finance or the travel industry, so they've got a bird's-eye view of the international tourism climate.

They're also all Millennials.

We all agreed that while much of the world's economies are just skirting along, with central banks leading the tortoise-style growth race, people still have the means (and desire) to travel. And now, more than ever, access to travel is easier and cheaper.

Socially, the under 35 crowd is less eager to work or settle down and more compelled to explore.

To verify our thesis, we started scrolling through our Facebook, Instagram and Twitter feeds. It looked like we were on the right track. The vast majority of posts had to do with travel. Most of our peers seemed to be more concerned with showing off their selfies taken in foreign lands than they were about political issues.

It turns out our little social experiment is supported by tons of studies, including a recent Expedia (Nasdaq: EXPE) report that showed Millennials travel frequently, typically in groups, and don't like to spend much money, but want to look like they did.

Immediately, I started thinking about how traders could capitalize on these trends. How does one travel on the cheap, look like they've spent a million bucks, and get plenty of photo ops along the way?

The first thing that came to my mind was cruise lines. For around $1,000, you can spend a week eating and drinking like a king, visiting exotic locations and making amazing memories (while posting about them on social media). Plus, cruises offer a generally safe environment where you can meet tons of other travelers.

With this in mind, I was curious to see just how the cruise sector was performing. I know global terrorism and the Zika virus scare had taken their toll, but it had been a while since I dug into the actual charts and fundamentals.

There was certainly a lot to love. And I found one company in particular whose shares have the potential for some serious upside. Its current forward price-to-earnings (P/E) ratio is near its 20-year lows, and analysts' consensus price target is almost 50% above recent prices.

Then, something even more interesting caught my attention. Just last week, the company's CEO -- a position as "inside" as it gets -- bought $3 million worth of stock, flat out.

These factors alone made for a convincing bullish argument. And the more I looked, the more I saw a deeply discounted stock that was too good to pass up.

Norwegian, Royal Caribbean Cruises (NYSE: RCL) and Carnival (NYSE: CCL) essentially enjoy an oligopoly in the cruise space. Norwegian controls a little more than 9% of the market, with the other two accounting for a combined 71%.