Guy Adami Is Bullish On Royal Caribbean

On CNBC's Fast Money, Guy Adami spoke about Royal Caribbean Cruises Ltd RCL. He said that the whole sector got crushed in February because of Zika concerns. All valuations in the space are now cheap as they have been in the last 15 years.

Adami believes that the main driver for the stock is going to be China. Companies in the space have built too many ships in the region, but that is going to be fixed because of growing demand. Analysts believe there is 30 to 40 percent growth potential in China over the next five or six years.

Related Link: Carnival Cruise Lines Could Be A Better Play On Oil Than Its Peers

The company has a good balance sheet and it pays 2.5 percent dividend yield, added Adami. He also presented a chart of the stock and he concluded that technicals look good. He noticed a double bottom pattern on the chart and he thinks that the stock could trade higher to $88.

Adami concluded that all the bad news are priced in and Royal Caribbean has a huge growth opportunity in China. He thinks that the Zika virus is overblown and valuations are compelling.