Can This Leisure Group Cruise Higher? Cramer Thinks So

Cruise stocks have been red-hot this year, but seem to be flying under the radar. But investors should consider picking up a few of the cruise stocks, at least according to CNBC's Jim Cramer.

Cramer explained during his daily "Mad Money" show that there has been a shift in sentiment within the cruise sector. For instance, cruises used to be considered an old person's vacation, but in today's "selfie generation," millennials feel the need to take selfies from all over the world.

The cruise industry's much-needed relief follows a few years of turmoil dominated by accidents, viral outbreaks such as Ebola and a victim of macroeconomic uncertainty. Fast forward to today, and millennials are "taking cruises like never before."

Billions In Investment

Cruise executives are eager to invest in their business to drive continued growth for the coming years. The industry as a whole is projected to spend $6.8 billion on new ships this year, and the figure is expected to grow in 2018 and 2019.

"You don't spend that kind of dough unless you're feeling real confident about the future," Cramer said.

Cruise executives continue slashing costs wherever they can and replacing old ships with newer and more efficient ones. This is part of the group's commitment to deliver shareholder value by boosting earnings. For example, Royal Caribbean Cruises Ltd RCL pledged in 2014 to double its earnings by 2017 and achieve a double-digit return on invested capital, an initiative in which Cramer said he's confident.

Cramer's top pick in the group is Carnival Corp CCL, due to the leadership of CEO Arnold Donald.

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