SS/RCCL Finances: Improving, Options, Questions??!!

[TLCOhio]

2 minutes ago, RetiredandTravel said:

I think Robin Farley, the UBS analyst is highly regarded (#2 down)

https://www.institutionalinvestor.com/article/b1nwh5jp639xs5/The-All-America-Research-Team-The-Hall-of-Famers

 

YES!!  Very good background and follow-up about this UBS analyst.  In reading the comments, this expert seems sharp and skilled.  But, as admitted, this field in attempting to predict the financial future is not easy, nor perfect.  Lots of speculation!!  Also, challenging for peering into a cloudy crystal ball.  Right or wrong??  

 

From the Wall Street Journal this morning, they had this headline: “Cruise Stocks Don’t Lead to Buried Treasure" with this sub-headline: "Investors are bailing even as occupancy is up and Covid-19 restrictions are lifting.”

 

Here are some of the WSJ reporting highlights: “Cruise-line stocks have been taking on water since Covid-19 hit, but lately investors have really abandoned ship. Hovering over $6 a share, Carnival Corp.’s stock hasn’t been this cheap since Boyz II Men, TLC and Michael Jackson ruled the radio—that is three decades ago for anyone not old enough to remember.”

 

Cute opening?  What else was cited?  Here is more: "In an investor presentation last week, Norwegian led with a laundry list of these and other positive industry developments that have come to pass since its first-quarter earnings call less than six months ago. That did little to move the needle: Norwegian shares have fallen a further 12% in the days since.  Despite the fact that cruise lines have always offered a solid value proposition in travel, including food and entertainment in addition to lodging, cruise voyages have historically priced at a discount to land hotels—a spread that has recently widened."

 

But, here is this item/insight: "Perhaps the value proposition of a cruise gets more attractive to travelers in a worsening economy. That at least would improve demand, but would do little to improve pricing power. The Jefferies survey found avid cruisers are uncomfortable with meaningfully higher prices versus prior trips. Among those surveyed, 'Price/Value' was the most important factor to the majority of respondents when considering a cruise—over destination, comfort and even safety."

 

Interesting question about the "value trap" as customers realize that cruises offer decent pricing, but can the cruise lines up their prices high enough to cover the higher fuel and operating costs AND the need to pay off billions of dollars in debt piled up during the past two and a half years?  What is the correct answer?

 

Full story at:

https://www.wsj.com/articles/cruise-stocks-dont-lead-to-buried-treasure-11665570602

 

THANKS!  Enjoy!  Terry in Ohio

 

Venice: Loving It & Why??!!  Is one of your future desires or past favorites? See these many visual samples for its great history and architecture.  This posting is now at 98,034 views.

http://boards.cruisecritic.com/showthread.php?t=1278226

[rkacruiser]

8 hours ago, RetiredandTravel said:

I think Robin Farley, the UBS analyst is highly regarded (#2 down)

 

 

Yes, he is.  I read and try to learn.  But, my past experiences with an account executive with UBS and what he wanted me to do with my account (that would generate much money for him) and the complaint I filed with the branch office manager and his response soured me on what I "learned" from UBS.  That entire account portfolio went elsewhere.  

[rkacruiser]

8 hours ago, RetiredandTravel said:

I think Robin Farley, the UBS analyst is highly regarded (#2 down)

 

 

Yes, he is.  I read and try to learn.  But, my past experiences with an account executive with UBS and what he wanted me to do with my account (that would generate much money for him) and the complaint I filed with the branch office manager and his response soured me on what I "learned" from UBS.  That entire account portfolio went elsewhere.  

[RetiredandTravel]

11 hours ago, rkacruiser said:

 

Yes, he is.  I read and try to learn.  But, my past experiences with an account executive with UBS and what he wanted me to do with my account (that would generate much money for him) and the complaint I filed with the branch office manager and his response soured me on what I "learned" from UBS.  That entire account portfolio went elsewhere.  

 

 

That's unfortunate.  The Wealth Management and Equity Research departments are completely separate and compensated differently.  I manage our money I thought most of these Wealth Management people got paid on a percent (1%?) of assets.  I get a lot of invites for free dinners tho.

 

I think he's a she. 🙂

 

 

[TLCOhio]

On 10/13/2022 at 8:07 AM, RetiredandTravel said:

The Wealth Management and Equity Research departments are completely separate and compensated differently.  I manage our money I thought most of these Wealth Management people got paid on a percent (1%?) of assets.  I get a lot of invites for free dinners tho.  I think he's a she. 

 

Appreciate these comments and follow-ups from our SW Ohio neighbor and R&T about the financial firms and how they operate.  Yes, there always are questions as to who is operating in what way to benefit the company versus the customer.  My key "words of wisdom" are "buyer beware" and "trust, but verify".  Many in "sales" are generally always nice and friendly.  But, are you asking the right questions and focused on the most important factors??  

 

From the Wall Street Journal, below are their charts showing the performance by the three major cruise lines during the most recent five trading days.  Kind of up, overall, for the week?  Also below is the chart from the Wall Street Journal for the S&P 500 since the first of this year.  The downward slide for the overall markets has been clear during the first nine and a half months of 2022.  What is missing?

 

Any predictions for the stock market and cruise stocks during the final two and a half months of 2022?

 

THANKS!  Enjoy!  Terry in Ohio

 

Amazon River-Caribbean 2015 adventure live/blog starting in Barbados. Many visuals from this amazing river and Caribbean Islands (Dutch ABC's, St. Barts, Dominica, Grenada, San Juan, etc.).  Now at 70,429 views:

www.boards.cruisecritic.com/showthread.php?t=2157696

 

From the Wall Street Journal, below are the charts for trading in the past five days on the three major cruise lines.  Things went up, UP big on Wednesday, but trading was fairly flat on Thursday and Friday.  Where for next week and the rest of October?:

(Open your screen/viewer wider to see these visuals larger/better!)

 

 

 

Here is the WSJ chart reflecting the Royal Caribbean stock performance since the first of this year.  The 2022 trend is hard to hide and ignore.  Right?:

 

Here is the WSJ chart for the S&P 500 overall index on the stock market since the start of this year.  Is "downward" a reasonable and correct summary for the stock market's negative slide.:

[crusinbanjo]

On 10/13/2022 at 8:07 AM, RetiredandTravel said:

 

 

That's unfortunate.  The Wealth Management and Equity Research departments are completely separate and compensated differently.  I manage our money I thought most of these Wealth Management people got paid on a percent (1%?) of assets.  I get a lot of invites for free dinners tho.

 

I think he's a she. 🙂

 

 

Actually, the percent paid for money management or an advisor can vary widely.  Some I have seen are as low as .5% or as high as 3.5%.  
 

As for the free dinners, I get many invites as well, sometimes multiple times per week.  If inflation keeps going up and the markets keep going down, I might start accepting those invitations just for the free food!  Haha

Edited October 15, 2022 by crusinbanjo

[RetiredandTravel]

3 hours ago, crusinbanjo said:

Actually, the percent paid for money management or an advisor can vary widely.  Some I have seen are as low as .5% or as high as 3.5%.  
 

As for the free dinners, I get many invites as well, sometimes multiple times per week.  If inflation keeps going up and the markets keep going down, I might start accepting those invitations just for the free food!  Haha

 

 

I don't need to pay someone that much to mess things up I can do it on my own for free.    How do they justify those fees?  50bps is ok but when you get over 1% outperforming the overall market reduces greatly (attached is the performance on active mutual fund managers).  I'm  guessing many don't show their performance vs a benchmark like a blend of the S&P500 and aggregate bond index.  Those free dinners must be painful.

 

https://www.cnbc.com/2022/10/01/underperformance-is-abysmal-in-the-long-run-for-active-fund-managers.html

 

Thursday the market put in what I viewed as a  very encouraging reversal day, ending much higher after putting in a new low in the bear market on high volume.   Rising yields and the Friday tradeoff dampened my enthusiasm considerably although we are going into a seasonally strong period for the stock market.  I got a dollar and a dream.

 

 

 

 

[crusinbanjo]

You are quite correct, money managers can, and often are, just as poor at the market as I am.  For most of my investments, I continue to be self directed and I generally have done better than the money I have under management.   I get to pay 0.5% on management fees, anymore and I would walk away.  Recently I was persuaded to move some $$ to another manager….. that turned out very poorly.  It will take me a long time to recover the losses they delivered…….  So those meals, as painful as they are to listen to, might tast pretty good.  Haha

[Tothesunset]

You guys should complain!

 

We UK taxpayers pay the government up to 45% to manage our money and they lose the lot. 

[rkacruiser]

2 hours ago, crusinbanjo said:

For most of my investments, I continue to be self directed and I generally have done better than the money I have under management

 

Most of the time, this has been my experience.  Although, some of my mutual funds have done as well as, or better,  than my own account.  

 

As for fees, one of the reasons I appreciate my advisor is that when I want to make a trade in my own self-directed account, he will transfer those shares to my managed account, sell or buy from that account which is commission free, and then transfer the new shares to my self-directed account.  Never expected that to happen when I began working with him.  But, it has.  

 

On 10/13/2022 at 8:07 AM, RetiredandTravel said:

I get a lot of invites for free dinners tho.

 

I have not received such offers since mid-March, 2020.  I do receive such offers for pre-planning funeral arrangements, however.  Haven't attended those.  (How about a glass of Arsenic wine with your dinner, sir?)  😀

[RetiredandTravel]

3 minutes ago, rkacruiser said:

 

I have not received such offers since mid-March, 2020.  I do receive such offers for pre-planning funeral arrangements, however.  Haven't attended those.  (How about a glass of Arsenic wine with your dinner, sir?)  😀

 

 

Now that's funny.   🤣 

 

Also thanks for the reference to the Rainbow Room in another post.  I took my wife on a date there a long time ago, fond memories.  We had Chateaubriand.  Olive Garden probably better reflected my financial situation at the time.

[rkacruiser]

2 hours ago, RetiredandTravel said:

Also thanks for the reference to the Rainbow Room in another post.  I took my wife on a date there a long time ago, fond memories.  We had Chateaubriand.  Olive Garden probably better reflected my financial situation at the time.

 

Lobster Thermidor was what I ordered and it was great!  My usual restaurant patronage was the same as yours at that time.  

[TLCOhio]

On 10/15/2022 at 5:43 PM, RetiredandTravel said:

Rainbow Room.  I took my wife on a date there a long time ago, fond memories.  We had Chateaubriand.  Olive Garden probably better reflected my financial situation at the time.

 

Yes, agree that Lobster Thermidor and Chateaubriand sound very tasty and wonderful.  Great comments and follow-ups.  

 

From a financial website this morning, they had this headline: “3 Red Flags for Carnival Stock” with these highlights: “Down 67% year to date, Carnival Corporation has probably landed on some value investors' radar. But a cheap stock doesn't always mean a good deal. 1. The massive debt load.   Like most cruise companies, Carnival was hurt by the COVID-19 pandemic, especially after the U.S. Centers for Disease Control's (CDC) no-sail order scuttled its operations for much of 2020. To survive the crisis, management turned to debt markets.  As of the third quarter, Carnival reports $28.5 billion in long-term debt -- up from just $9.7 billion at the end of 2019.  2. Macroeconomic headwinds.  Carnival's precarious debt situation also exposes it to macroeconomic headwinds. The U.S.' annual inflation rate stands at 8.2% as of September. And the inflation reflects higher energy and material costs, which erode Carnival's margins and make profitability harder to attain.  3. Better alternatives. The entire cruise industry faces similar problems with debt and operational losses from the COVID-19 pandemic. But Carnival seems to have emerged from the crisis in a weaker position than its rival Royal Caribbean which has 'only' fallen 45% since the start of the year.”

 

Is this a vote of confidence in Carnival?  Does not sound that positive!!  Am I missing something important?  A connected video tied to this story from another analyst notes that Carnival does not have the pricing power compared to others in the hospitality business.

 

Full story at:

https://www.msn.com/en-us/money/companies/3-red-flags-for-carnival-stock/ar-AA133gFS

 

THANKS!  Enjoy!  Terry in Ohio

 

AFRICA?!!?: Fun, interesting visuals, plus travel details from this early 2016 live/blog. At 53,294 views. Featuring Cape Town, South Africa’s coast, Mozambique, Victoria Falls/Zambia and Botswana's famed Okavango Delta.

www.boards.cruisecritic.com/showthread.php?t=2310337

[TLCOhio]

From a financial website earlier this month, they had this headline: “What the Smartest Investors Know About Carnival Stock” with these highlights: “Carnival, just now getting their sea legs back under them, gets more complicated as you peel back the layers of the onion.  The pandemic brought the company to its knees. The last place you want to hide from an airborne virus is on a ship, isolated at sea among hundreds of strangers. Ships are expensive to maintain and operate, and the travel restrictions resulted in billions of losses for Carnival, which was burning an average of $650 million of cash every month in the early phases of the pandemic.  The company had to take drastic measures to survive, and that included borrowing a ton of money.  The company has many loans maturing over the next several years. For example, it has $991 million of debt coming due in the fourth quarter of this year. It has a total of $2.4 billion coming due in 2023 and another $4.9 billion in 2024. A whopping $16.9 billion is expected to mature through 2026.”

 

Full story at:

https://www.nasdaq.com/articles/what-the-smartest-investors-know-about-carnival-stock

 

THANKS!  Enjoy!  Terry in Ohio

 

Kotor/Montenegro:  Various visual samples, tips, details, etc., for this scenic, historic location. Over 49,606 views.

http://boards.cruisecritic.com/showthread.php?t=1439193

[crusinbanjo]

1 hour ago, TLCOhio said:

From a financial website earlier this month, they had this headline: “What the Smartest Investors Know About Carnival Stock” with these highlights: “Carnival, just now getting their sea legs back under them, gets more complicated as you peel back the layers of the onion.  The pandemic brought the company to its knees. The last place you want to hide from an airborne virus is on a ship, isolated at sea among hundreds of strangers. Ships are expensive to maintain and operate, and the travel restrictions resulted in billions of losses for Carnival, which was burning an average of $650 million of cash every month in the early phases of the pandemic.  The company had to take drastic measures to survive, and that included borrowing a ton of money.  The company has many loans maturing over the next several years. For example, it has $991 million of debt coming due in the fourth quarter of this year. It has a total of $2.4 billion coming due in 2023 and another $4.9 billion in 2024. A whopping $16.9 billion is expected to mature through 2026.”

 

Full story at:

https://www.nasdaq.com/articles/what-the-smartest-investors-know-about-carnival-stock

 

THANKS!  Enjoy!  Terry in Ohio

 

Kotor/Montenegro:  Various visual samples, tips, details, etc., for this scenic, historic location. Over 49,606 views.

http://boards.cruisecritic.com/showthread.php?t=1439193

Glad I'm not the CFO at CCL

[RetiredandTravel]

21 hours ago, TLCOhio said:

From a financial website earlier this month, they had this headline: “What the Smartest Investors Know About Carnival Stock” with these highlights: “Carnival, just now getting their sea legs back under them, gets more complicated as you peel back the layers of the onion.  The pandemic brought the company to its knees. The last place you want to hide from an airborne virus is on a ship, isolated at sea among hundreds of strangers. Ships are expensive to maintain and operate, and the travel restrictions resulted in billions of losses for Carnival, which was burning an average of $650 million of cash every month in the early phases of the pandemic.  The company had to take drastic measures to survive, and that included borrowing a ton of money.  The company has many loans maturing over the next several years. For example, it has $991 million of debt coming due in the fourth quarter of this year. It has a total of $2.4 billion coming due in 2023 and another $4.9 billion in 2024. A whopping $16.9 billion is expected to mature through 2026.”

 

Full story at:

https://www.nasdaq.com/articles/what-the-smartest-investors-know-about-carnival-stock

 

THANKS!  Enjoy!  Terry in Ohio

 

Kotor/Montenegro:  Various visual samples, tips, details, etc., for this scenic, historic location. Over 49,606 views.

http://boards.cruisecritic.com/showthread.php?t=1439193

 

 

CCL (+11%  today) announces debt deal.  Maybe to extend the 991 due this quarter out to 2028?

 

https://www.marketwatch.com/story/carnival-corp-announces-offering-of-125-billion-of-high-yield-bonds-due-2028-2022-10-18

 

 

 

 

[canderson]

1 hour ago, RetiredandTravel said:

 

 

CCL (+11%  today) announces debt deal.  Maybe to extend the 991 due this quarter out to 2028?

 

https://www.marketwatch.com/story/carnival-corp-announces-offering-of-125-billion-of-high-yield-bonds-due-2028-2022-10-18

 

 

 

 

Speaking of 11%, I'd swear I heard that these were 11% bonds?!

[RetiredandTravel]

5 minutes ago, canderson said:

Speaking of 11%, I'd swear I heard that these were 11% bonds?!

 

 

Looks like a 11 1/2% coupon, also depends on the price of course.  I don't know a great deal about it but this is a quote from a PM on the bonds in the FT.

"John McClain, a high-yield portfolio manager at Brandywine Global Investment Management, said the bond showed Carnival was “getting creative” with collateral to avoid paying “eye-watering” interest rates. “Without the ships, I don’t believe that they would have access to capital at a price they would have been comfortable with,” he said."

 

https://www.ft.com/content/bb89b17f-aac9-45cb-865c-5995a7594d9c

 

 

[TLCOhio]

2 hours ago, RetiredandTravel said:

CCL (+11%  today) announces debt deal.  Maybe to extend the 991 due this quarter out to 2028?

https://www.marketwatch.com/story/carnival-corp-announces-offering-of-125-billion-of-high-yield-bonds-due-2028-2022-10-18

 

Appreciate this very good link and follow-up from R&T.  From this short story, this part caught my eye: "As part of the deal, the company and subsidiaries will contribute 12 unencumbered vessels to Carnival Bermuda which will continue to be operated under of the company's Carnival plc's or another unit's brands."

 

How many unencumbered vessels does Carnival have left to mortgage?  How much more can they borrow?  

 

As of mid-afternoon today, Royal Caribbean is up 6.6%.  Carnival is up 10.8%.  Does borrowing billions more make investors happy and confident?  Also, if borrowing at 11% interest rate, that does add up at some point to requiring some profits in order to pay off in future years.  Right or wrong?

 

THANKS!  Enjoy!  Terry in Ohio   

 

 

Dubrovnik!  Visual samples, tips, details, etc., for this super scenic and historic location. Over 49,057 views.    

http://boards.cruisecritic.com/showthread.php?t=1439227

[RetiredandTravel]

15 minutes ago, TLCOhio said:

 

How many unencumbered vessels does Carnival have left to mortgage?  How much more can they borrow?  

 

 

 

i don't know but according to the Carnival website they have about 90 ships if you include all the brands.  The FT article is very interesting.

 

https://www.carnivalcorp.com/corporate-information/our-brands

 

 

 

 

[TLCOhio]

30 minutes ago, RetiredandTravel said:

Looks like a 11 1/2% coupon, also depends on the price of course.  

https://www.ft.com/content/bb89b17f-aac9-45cb-865c-5995a7594d9c

 

Yes, agree, that Financial Times article is fascinating, plus the added added info shared by smart and savvy R&T.  Here is what caught my eye and rattled my brain: 

 

"Carnival is expected to pay an expensive coupon of about 11.5 per cent for the six-year debt. The issuance is the company’s first foray into the junk bond market since May when a 10.5 per cent bond coupon spooked the stock market."

 

Reading the term "JUNK BOND" is always catching my attention.  Plus, 11.5% interest rate.  Also, this little detail: "The structure of the bond puts the lenders 'at the front of the line' for any claim on the 12 vessels in the event of Carnival being unable to meet payments."

 

THANKS!  Enjoy!  Terry in Ohio

[rkacruiser]

7 hours ago, RetiredandTravel said:

CCL (+11%  today) announces debt deal.

 

Much confusion among us peons about what this means.  

 

5 hours ago, TLCOhio said:

"As part of the deal, the company and subsidiaries will contribute 12 unencumbered vessels to Carnival Bermuda which will continue to be operated under of the company's Carnival plc's or another unit's brands."

 

"Carnival Bermuda" was news to me.  I was unaware that such an entity existed.  What does this then mean about the Registry/flag for those ships?  If a change takes place for those ships, what does this mean?  

 

5 hours ago, TLCOhio said:

As of mid-afternoon today, Royal Caribbean is up 6.6%.  Carnival is up 10.8%.  Does borrowing billions more make investors happy and confident?

 

 

Carnival ended today's Market session slightly over 11% which exceeded RCL and NCLH.  Is it not a fact that we have an irrational Market at this time?  

 

 

[RetiredandTravel]

 

Thank you Terry, I appreciate the kind words.

 

 

10 hours ago, rkacruiser said:

 

"Carnival Bermuda" was news to me.  I was unaware that such an entity existed.  What does this then mean about the Registry/flag for those ships?  If a change takes place for those ships, what does this mean?  

 

 

RKA I have no idea how all this works.  Here is a list of CCL subsidiaries not sure how up to date it is.

 

https://www.sec.gov/Archives/edgar/data/815097/000081509719000004/exhibit21201810-k.htm

 

 

[rkacruiser]

8 hours ago, RetiredandTravel said:

RKA I have no idea how all this works.  Here is a list of CCL subsidiaries not sure how up to date it is.

 

https://www.sec.gov/Archives/edgar/data/815097/000081509719000004/exhibit21201810-k.htm

 

 

Thanks!  I had no idea that there were that many!  

[TLCOhio]

On 10/18/2022 at 8:35 PM, rkacruiser said:

Much confusion among us peons about what this means.  

Carnival ended today's Market session slightly over 11% which exceeded RCL and NCLH.  Is it not a fact that we have an irrational Market at this time?  

 

Agree there is much "confusion" as to what ALL of this means by how the markets are treating stocks, cruise lines, etc.  Also watching the economics in the UK as their challenges are significant in figuring out their future direction, leadership, etc.  Anyone from the UK with good insights and predictions?

 

From the Wall Street Journal late Friday, below are their charts for the three major cruise lines.  Clearly Tuesday was a big, BIG jump, up, UP!!  Then a little rocky for the rest of the week.  Where for later this month and into the end of 2022?

 

THANKS!  Enjoy!  Terry in Ohio

 

Athens & Greece: Visuals, details from two visits in a city and nearby with great history, culture and architecture.  Now at 47,085 views.

http://boards.cruisecritic.com/showthread.php?t=1101008

 

From the Wall Street Journal, below are the charts during the past week for the three major cruise lines.  Kind of "rocky"?:

(Open your screen/viewer wider to see these visuals larger/better!)

 

 

 

Since the start of 2022, here has been the trend-line for RCL during the past nearly ten months.: