HAL. As an Investment?

[LocoLoco1]

I am quite surprised that here it is, Feb of 2021 and CCL common stock is actually a tad North of $20/share USD. Nonetheless, my murky tea leaves see rough sailing ahead.  . Everything factually appears ‘out there’ now as regards CCL and Vaccine, cancellations, FCC’s, their monthly cash burn, the Canada, Australia, & WHO kerfuffles etc. With that said,  I accept if it’s selling for $20/share... it’s indeed worth $20/share to someone. I stand here today, with suitcase in hand, a line in CCL’s accounts payable... OMG.  

[iancal]

What would concern me as an investor are three things.  First is cash flow.  Second is debt.  Third is common share dilution (plus convertible) bonds than reduce earnings per share.   

 

Not to mention competition from some of the smaller cruise lines who have picked up ships at fire sale prices, have more attractive balance sheets, and are as a result very competitive.

Edited February 12, 2021 by iancal

[rkacruiser]

3 hours ago, LocoLoco1 said:

I am quite surprised that here it is, Feb of 2021 and CCL common stock is actually a tad North of $20/share USD.

 

An interesting observation; in the meltdown of the economy in 2008-2009, CCL held its worth considerably better than RCI.  RCI tanked!  When recovery occurred, RCI raced ahead of CCL until Covid arrived.  Never have understood how this happened.

[LocoLoco1]

21 hours ago, rkacruiser said:

 

An interesting observation; in the meltdown of the economy in 2008-2009, CCL held its worth considerably better than RCI.  RCI tanked!  When recovery occurred, RCI raced ahead of CCL until Covid arrived.  Never have understood how this happened.

Just today Feb 13, Behrenberg’s Analyst, Stuart Gordon, just downgraded CCL. ‘A $14/Dollar stock’; as our biggest concern is that the Debt Load is unsustainable.’  1 man’s opinion of course. However....

[rkacruiser]

1 hour ago, LocoLoco1 said:

Just today Feb 13, Behrenberg’s Analyst, Stuart Gordon, just downgraded CCL. ‘A $14/Dollar stock’; as our biggest concern is that the Debt Load is unsustainable.’  1 man’s opinion of course. However....

 

Have never heard of Behrenberg Bank.

 

Checking Yahoo Finance, it's performance outlook short term, mid term, long term:  all are positive.

 

No question that CCL's debt load is a concern.  During the 2008-2009 period, RCI's debt load contributed to the extremely drop in the price of their shares.  

 

None of us know how this "will all shake out" in the end.  I remain optimistic.  

 

I cannot envision Micky Arison or his relatives that have such large investments in CCL on the street corners of Miami selling apples as this country once saw during the 20th Century.  (Being that Mr. Arison lives in Florida, maybe the "apples" will be the citrus fruit of the season? 😀)

[iancal]

Just take a look at the insider stock sales of CCL.   I can assure you than none of the execs of CCL and subsidiaries will be selling apples on the corner.   

[LocoLoco1]

The newest (and next) CCL Mega cruiseships will indeed sail. I do, however forsee a sea-change for the industry. Profitably marketing those goliaths to my 30-something kids may leave me on the outside looking in. By all appearances, I witnessed a ‘Golden Age’ of Int’l leisure sailing; beginning in 1971, and now lately with Cunard and HAL. I’m looking at a Costa Rican All-Inclusive Resort as an alternative to a 30-day cruise after 1 more Alaskan peek with HAL. 

[iancal]

As an investment...if I had CCL stock I would be unloading it.

[Indianadaytripper]

1 hour ago, iancal said:

As an investment...if I had CCL stock I would be unloading it.

Good idea up 8% today after borrowing millions more with no firm sailings in site.

[LocoLoco1]

4 hours ago, Indianadaytripper said:

Good idea up 8% today after borrowing millions more with no firm sailings in site.

Who the HECK bought those Carnival Unsecured Notes this week?? It’s Section 144a debt, meaning it can’t even be sold to US individuals no matter how wealthy. And CCL shares are trading North of $21/USD. Indeed a topsy-turvey ocean out there. 

[Indianadaytripper]

18 minutes ago, LocoLoco1 said:

Who the HECK bought those Carnival Unsecured Notes this week?? It’s Section 144a debt, meaning it can’t even be sold to US individuals no matter how wealthy. And CCL shares are trading North of $21/USD. Indeed a topsy-turvey ocean out there. 

Although we individuals cannot buy these uninsured bonds institutional investors can.

 

[rkacruiser]

51 minutes ago, Indianadaytripper said:

Although we individuals cannot buy these uninsured bonds institutional investors can.

 

 

Might be a reason for an individual investor not to sell?  The "big folk" ought to know more than we "little folk" know.

 

Truly, it is a difficult decision as to what to do.  But, such a decision does not keep me up at nights.  That's an advantage to having invested and saving with "eggs in many baskets".    

[Indianadaytripper]

12 hours ago, rkacruiser said:

 

Might be a reason for an individual investor not to sell?  The "big folk" ought to know more than we "little folk" know.

 

Truly, it is a difficult decision as to what to do.  But, such a decision does not keep me up at nights.  That's an advantage to having invested and saving with "eggs in many baskets".    

After a little research. Price of CCL is below book value. Both RCL, NCLH are considerably much higher. Something big Mr. Buffet looks in buying opportunities now, looking forward. Theirs some big investment firms buying CCL with the large volumes in trading. They also seem to buying the other cruise lines stocks. 100 shares isn’t that much of an investment for the benefits going forward, especially for a frequent cruiser and future price potential.  Just my humble opinion 

[sfaaa]

Saudis have been investing heavily in CCL. They may know something we don't.

[rkacruiser]

8 hours ago, Indianadaytripper said:

Something big Mr. Buffet looks in buying opportunities now, looking forward. Theirs some big investment firms buying CCL with the large volumes in trading. They also seem to buying the other cruise lines stocks. 

 

I respect Mr. Buffet's philosophy.  

 

1 hour ago, sfaaa said:

Saudis have been investing heavily in CCL. They may know something we don't.

 

I need to do some researching that I have not done for several months.  

[LocoLoco1]

14 minutes ago, rkacruiser said:

 

I respect Mr. Buffet's philosophy.  

 

 

I need to do some researching that I have not done for several months.  

‘Real Money’s Jonathan Heller laid it out today about Carnival. ‘1/Billion shares at $23/sh. $27/Billion debt. Minus  $9/Billion in cash. EV (Enterprise Value) of $41/Billion. This don’t float my boat.’  END  Me?? I am ready to cruise, I just hope they will still have cloth napkins in the Dining Rm. 

[Mary229]

I have continued to follow this thread.  The first question a wise investor asks is “what is the best use of this available money on this day?”    That is the right question.  I can’t see a way to CCL being the best use of investment dollars today or soon.   

[Hlitner]

1 hour ago, LocoLoco1 said:

‘Real Money’s Jonathan Heller laid it out today about Carnival. ‘1/Billion shares at $23/sh. $27/Billion debt. Minus  $9/Billion in cash. EV (Enterprise Value) of $41/Billion. This don’t float my boat.’  END  Me?? I am ready to cruise, I just hope they will still have cloth napkins in the Dining Rm. 

I assume those cloth napkins will be collateral for some obligation.   Folks should remember that in 1929 it was mostly the big institutional investors who were the first to jump out windows.  And it was big money folks (such as Citigroup and JP Morgan Chase) who bankrolled Enron!   I think the problem with the cruise industry (as an investment) is that the cruise lines do not have a lot of control over their own future or ability to earn revenue.  They are at the mercy of government's all over the world most of whom have little interest the cruise industry vs the health/safety of their citizens.  Perhaps things will work out with vaccines saving the day.....and then again who knows?

 

Hank

[rkacruiser]

41 minutes ago, Hlitner said:

Perhaps things will work out with vaccines saving the day.....and then again who knows?

 

And, that is the precise quandary for us small investors of CCL and RCI.  

 

 

Edited February 18, 2021 by rkacruiser

[LocoLoco1]

4 hours ago, rkacruiser said:

 

I respect Mr. Buffet's philosophy.  

 

 

I need to do some researching that I have not done for several months.  

Real Money’s Jonathan Heller laid it out today: ‘With 1Billion shares at about $22/sh. today, CCL’s Market Value is $24/Billion, and debt $27/Billion.’ Enterprise Value $41/Billion?? Sumpthin’ don’t add up.’  

[prescottbob]

14 minutes ago, LocoLoco1 said:

Real Money’s Jonathan Heller laid it out today: ‘With 1Billion shares at about $22/sh. today, CCL’s Market Value is $24/Billion, and debt $27/Billion.’ Enterprise Value $41/Billion?? Sumpthin’ don’t add up.’  

 

[prescottbob]

 Just another opinion  from one of our United Kingdom brethren:

 

https://www.fool.co.uk/investing/2021/02/13/the-carnival-share-price-plunges-60-should-i-buy-the-stock/

 

No worries.

 

Be well.

Bob

[LocoLoco1]

Ponder this: My employer was a huge Railroad with massive debt, but also had huge Oil&Gas and vast Timber forest cash cow assets. Answer: Carve the company up; issue new stock and saddle 1 with all the debt and leave the others debt-free. Methinks CCL has Accountants on speed-dial 24/7. (ps. Yes, Warren B. was my boss.. ) 

[kangforpres]

What actually is the demand for the product going forward? Yes all of us on CC have "pent-up" demand to cruise again, but we a specialized market segment and not representative of the average travel consumer.  With the economy ravaged by the pandemic and unemployment at very high levels I think the overall demand for cruising will be soft, like 2009 levels.

 

Also, I don't anyone shivering in their homes in Texas with no power and water is thinking "first thing I'm gonna do when the power comes back on is book a cruise!"

 

-P.

[KirkNC]

3 minutes ago, kangforpres said:

What actually is the demand for the product going forward? Yes all of us on CC have "pent-up" demand to cruise again, but we a specialized market segment and not representative of the average travel consumer.  With the economy ravaged by the pandemic and unemployment at very high levels I think the overall demand for cruising will be soft, like 2009 levels.

 

Also, I don't anyone shivering in their homes in Texas with no power and water is thinking "first thing I'm gonna do when the power comes back on is book a cruise!"

 

-P.

I think demand is one of the many unknowns.  As you say, the crowd here on CC will go but we are a sliver of the market.  And the lines talk about good demand but I think a lot of that is driven by all the FCC issued.  Then you have the repetitional damage done by CDC and images from people stuck on ships last spring.  Some off set by less ships but who knows.