When will Carnival shares be worth buying ?

[Harry Peterson]

7 hours ago, ALWAYS CRUZIN said:

Even if it goes lower. To buy now gets you a very good chance of making some nice profit down the road. Plus the OBC you get on Carnival and Princess. I have a lot of carnival and Royal. I am down currently $30k. Over the past years I have done very well. Basically the money I am down is less than what I have done over the years. However I bet it will climb next year when our economy looks far better. remember, I am still getting the OBC. Taking a 14 day soon on Princess. That gets me $250.00 OBC and I am a vet so another $250.00 OBC 

To buy now may indeed give you a chance of a nice profit down the road.  I suspect there's a far greater chance of losing the lot, though, because of Carnival's huge and very expensive debt pile, and that's the much more common view amongst financial commentators.

Edited June 23, 2022 by Harry Peterson

[gsmt47471015]

Just a general question , I own shares in Carnival however if my good lady were to buy some in her name would we be able to receive two sets of OBC or is it just for who the cruise is assigned to?  

[babs135]

Carnival seem to be moving ships around at the moment, taking on a couple from the Costa line.  What, if any, effect do you think this will have on the situation overall?

[terrierjohn]

37 minutes ago, gsmt47471015 said:

Just a general question , I own shares in Carnival however if my good lady were to buy some in her name would we be able to receive two sets of OBC or is it just for who the cruise is assigned to?  

Unfortunately no, unless you booked 2 cabins.

[wowzz]

4 minutes ago, terrierjohn said:

Unfortunately no, unless you booked 2 cabins.

Under two booking references.

[Gettingwarmer]

1 hour ago, gsmt47471015 said:

Just a general question , I own shares in Carnival however if my good lady were to buy some in her name would we be able to receive two sets of OBC or is it just for who the cruise is assigned to?  

No. Just one share OBC per cabin. 

[terrierjohn]

34 minutes ago, wowzz said:

Under two booking references.

Touche.

[gsmt47471015]

Thanks everyone , I thought that was the case but had to make sure👍

[PRINCESSTHE BEST]

11 hours ago, Harry Peterson said:

To buy now may indeed give you a chance of a nice profit down the road.  I suspect there's a far greater chance of losing the lot, though, because of Carnival's huge and very expensive debt pile, and that's the much more common view amongst financial commentators.

I totally agree Harry.

[Cruisemeister2002]

Thanks everyone for the large quantity of replies to my initial question as to whether Carnival Shares were worth buying. I actual bought 100 at £6.99 as I am on two cruises next year so for an outlay of just over £700 inclusive of dealer fees £11.95 I will get back £300 worth of onboard next year. What other form of investment would you get £300 for an outlay of £700 ? Unless you have some inside info on a horse.

[wowzz]

4 minutes ago, Cruisemeister2002 said:

Thanks everyone for the large quantity of replies to my initial question as to whether Carnival Shares were worth buying. I actual bought 100 at £6.99 as I am on two cruises next year so for an outlay of just over £700 inclusive of dealer fees £11.95 I will get back £300 worth of onboard next year. What other form of investment would you get £300 for an outlay of £700 ? Unless you have some inside info on a horse.

The point of course is that if the shares drop to £2 each, you will have lost £500, so after taking your £300 obc into account, you are out of pocket by £200.

You need to recoup your £699 to break even. After that you are in profit.

[Guest ccpm]

27 minutes ago, wowzz said:

The point of course is that if the shares drop to £2 each, you will have lost £500, so after taking your £300 obc into account, you are out of pocket by £200.

You need to recoup your £699 to break even. After that you are in profit.

I bought at £6.51 + fees and have 5 x 2 week cruises booked and OBC applied but if they tank to £2 I won't worry over much about the cash but rather will my cruises up to June 2023 be off too?

[Harry Peterson]

14 minutes ago, ccpm said:

I bought at £6.51 + fees and have 5 x 2 week cruises booked and OBC applied but if they tank to £2 I won't worry over much about the cash but rather will my cruises up to June 2023 be off too?

The share price is irrelevant, except so far as it reflects public opinion of the value of the company’s assets, including goodwill as a going concern.

 

If it were to go under, the administrators might well in any event want to continue the cruises to bring in the income that would be lost from outstanding balances.  Slightly similar to hotels, in a way - hotels don’t disappear when their owners go bust. They just get new owners.

[Guest ccpm]

2 minutes ago, Harry Peterson said:

The share price is irrelevant, except so far as it reflects public opinion of the value of the company’s assets, including goodwill as a going concern.

 

If it were to go under, the administrators might well in any event want to continue the cruises to bring in the income that would be lost from outstanding balances.  Slightly similar to hotels, in a way - hotels don’t disappear when their owners go bust. They just get new owners.

That is good to know. I have some inherited shares that I never look at but as P&O went so low it was part of my fun money used for the resulting extra OBC. As long as those cruises go ahead I'm in credit if they don't I have not lost much. 

[Harry Peterson]

5 minutes ago, ccpm said:

That is good to know. I have some inherited shares that I never look at but as P&O went so low it was part of my fun money used for the resulting extra OBC. As long as those cruises go ahead I'm in credit if they don't I have not lost much. 

No guarantees on that one though! Just a guess. The administrators, if the company does go under, would have a duty to maximise the income available to distribute to creditors. They’d weigh up the various options to decide that, and frequently in the holiday industry it makes more sense to go ahead with what was booked and collect the outstanding balances than cancel and lose them. It depends on how much it would bring in, as against how much it would cost to run the cruises. The closer to the date of administration, the greater the chance of its going ahead.

 

Or, of course, a predator company might see Carnival as a good value purchase if the shares go low enough.

[wowzz]

1 hour ago, Harry Peterson said:

Or, of course, a predator company might see Carnival as a good value purchase if the shares go low enough

Even if such a company existed, would not any purchase also involve taking over the mountain of debt that CCL have accumulated ?

It is the debt, and the interest repayments,  that are dragging the company down. 

[ALWAYS CRUZIN]

On 6/23/2022 at 1:51 AM, Harry Peterson said:

To buy now may indeed give you a chance of a nice profit down the road.  I suspect there's a far greater chance of losing the lot, though, because of Carnival's huge and very expensive debt pile, and that's the much more common view amongst financial commentators.

You may loose, but that is the chance of the stock market for any purchase. I do not think Carnival will go belly up. They are buying ships. Unless you are part of Carnivals financial division, you really have no way of knowing what Carnival might have up their sleeve for the future. Personally, I do invest with the hope of a nice return. If not. I invested what I can afford to loose. So far over the years with Carnival and RCCL stock I have done very well. Many procrastinate, do not buy in and later wish they did. That is how it goes. No other vacation is so inexpensive. That is what those that do cruising enjoy and bring up the stock. Ships are now starting to fill up. That is a very good sign.

[majortom10]

Many Carnival cruise lines are running at about 80% occupancy so a big improvement on when they first restarted cruising last Summer. They are probably not earning enough as yet to pay off the debt mountain they have hanging around their necks and that is why the share price is low. But with the new ships being built and hopefully the return to full capacity in the near future and with no isolation whilst onboard then hopefully more will have the confidence to cruise again and Carnival seeing a brighter future ahead being it long term.

[Harry Peterson]

1 hour ago, wowzz said:

Even if such a company existed, would not any purchase also involve taking over the mountain of debt that CCL have accumulated ?

It is the debt, and the interest repayments,  that are dragging the company down. 

Very true.  And in reality Carnival may already be worthless - it all depends on how you value its assets, and whatever Generally Accepted Accounting Principles might say that's always going to be a matter of argument.

 

I was thinking more in terms, though, of a private equity buyout, with some suitable corporate deal involving magically attributing the debts to the part of the company they don't want, and the assets to the bits they do.  No wonder newly qualified corporate lawyers in the City of London are being offered well over £100k pa on the day they qualify!

[wowzz]

6 hours ago, majortom10 said:

Many Carnival cruise lines are running at about 80% occupancy so a big improvement on when they first restarted cruising last Summer. They are probably not earning enough as yet to pay off the debt mountain they have hanging around their necks and that is why the share price is low. But with the new ships being built and hopefully the return to full capacity in the near future and with no isolation whilst onboard then hopefully more will have the confidence to cruise again and Carnival seeing a brighter future ahead being it long term.

A good optimistic review. 

Of course, the problem is that whilst CCL will no doubt take delivery of the new ships that they have signed for,  they cannot afford any future new ships due to the interest repayments on their mountain of debt.

So, over the next ten years, expect to see the assets sweated to death !

[PRINCESSTHE BEST]

Edited June 25, 2022 by PRINCESSTHE BEST

[PRINCESSTHE BEST]

1 minute ago, PRINCESSTHE BEST said:

The dividends that we previously enjoyed have evaporated for the foreseeable future.

[molecrochip]

10 hours ago, wowzz said:

A good optimistic review. 

Of course, the problem is that whilst CCL will no doubt take delivery of the new ships that they have signed for,  they cannot afford any future new ships due to the interest repayments on their mountain of debt.

So, over the next ten years, expect to see the assets sweated to death !

Not so.

 

Actually, there is a strong business case for new larger more efficient ships which replace older ships. The financing for ships is somewhat separate to the rest of their debt, and is a very specialised market. The debt is also secured upon the ship like a mortgage.

 

It won't surprise me to see an agreement in principal announced later this year, once the new CEO takes over. This would be for ships to be delivered 2026 thru 2030.

17 hours ago, majortom10 said:

Many Carnival cruise lines are running at about 80% occupancy so a big improvement on when they first restarted cruising last Summer. They are probably not earning enough as yet to pay off the debt mountain they have hanging around their necks and that is why the share price is low. But with the new ships being built and hopefully the return to full capacity in the near future and with no isolation whilst onboard then hopefully more will have the confidence to cruise again and Carnival seeing a brighter future ahead being it long term.

Yesterday's update was bright. Omicron has reduced 2022 optimism but they are now cash positive month on month (which includes paying their debt interest). This is a big step as it means they no longer need to find new liquidity.

 

2023 booking trends are still up towards the highs seen in 2019. This is great news. Onboard spend per passenger was at record levels last quarter but has dipped slightly - this really reflects the cost of living squeeze seen worldwide.

 

Most importantly, the institutional investors on the stock market liked it. The US stock was up 12% by yesterday close. (I mention US stock here as that had a full trading day post the announcement whereas the UK stock only had 2.5 hours, although still made a 8.5% increase). You won't get such a swing from retail investors.

[Selbourne]

2 hours ago, molecrochip said:

 

2023 booking trends are still up towards the highs seen in 2019. This is great news.

With the arrival of Iona and Arvia, passenger capacity is massively increased over 2019 levels, so booking numbers that match those levels must be woefully short of what they need to be - or do you mean that % of capacity filled (as opposed to passenger numbers) is similar?

[wowzz]

42 minutes ago, Selbourne said:

With the arrival of Iona and Arvia, passenger capacity is massively increased over 2019 levels, so booking numbers that match those levels must be woefully short of what they need to be - or do you mean that % of capacity filled (as opposed to passenger numbers) is similar?

The figures quoted refer to CCL as a total, not to P&O specifically.