RCCL stock price

[NMTraveller]

Any idea when RCL will start making money?  They are losing it rather quickly right now.

[grandgeezer]

1 hour ago, DirtyDawg said:

I am also a contrarian and a value investor who was in the industry for over 30 years.  I agree, buy that winter coat in the summer that’s deeply discounted, cheap and on sale when nobody wants em.

 

But , and it's a big BUT, check closely for any moth holes deep inside or that winter coat might turn out to be only a decent fall coat. And the deep freeze of the winter is not here yet! 🥶

 

The difference between the winter coat and cruise stocks is that if you live in area where the coat is needed, you probably get to use it every year, for an extended period of time. Until they start to reduce the massive debt, the value of the stock will not change dramatically or quick. Before you mention shareholder obc, the last I read, somewhere in the range of 75+%, is owned by institutional investors, who don’t care about obc, and they are the ones who will determine if the stock goes up, or down, and how much and how fast.

[DirtyDawg]

15 minutes ago, grandgeezer said:

The difference between the winter coat and cruise stocks is that if you live in area where the coat is needed, you probably get to use it every year, for an extended period of time. Until they start to reduce the massive debt, the value of the stock will not change dramatically or quick. Before you mention shareholder obc, the last I read, somewhere in the range of 75+%, is owned by institutional investors, who don’t care about obc, and they are the ones who will determine if the stock goes up, or down, and how much and how fast.

I would never mention shareholder obc because I couldn't care less about that stuff.  Perhaps because I've never invested in RCL - only speculated in it from time to time. 😉 

 

The value of the underlying assets might not change dramatically or quick but the price (note,I didn't say value) of the stock can be, and has been very volatile. Heck, the darn thing is up 60% in two months. Of course it could be down 60% in the next two months. Now that is volatile with a capital V!

 

BTW, @Kilroyshere analogy about the winter coat is one that has been used by contrarian investors for a very long time.  

 

Edited December 3, 2022 by DirtyDawg

[Stockjock]

Since I am with a big Wall Street firm, I can't comment on any stocks directly or offer advice on what to buy or sell.  With that said...

Typically, when stocks are beaten down badly, it is for good reason.  Sometimes, they stay at those levels, go even lower, or even disappear.  

When companies file for bankruptcy, often, but not always, there is a reorganization where the shareholder equity is wiped out and investors may lose all of their money.  There are a number of well-known companies, several airlines immediately come to mind, that have done this, left shareholders holding the bag, reorganized, and then issued new stock.  But that new stock often did no good for their old stock owners, who were typically wiped out.

It is a double-edged sword, in that you can have substantial swings in the stock prices, but there is always a direct correlation between risk and reward.   Always.

As noted elsewhere, this is a tremendously expensive industry to operate, and their business was decimated for at least a couple of years.  While trends are improving considerably, many of these companies have taken on a lot of debt to remain afloat, pardon the pun.

I've purchased companies' shares with beaten down prices and it's worked out well at times and poorly at times.  I bought different companies in the travel and leisure sector during the E-Bola crisis and Covid crisis.  Those were high risk trades, but I understood that and most have worked out well.  I also bought Lehman during the financial crisis of 2008 and lost all of my money when they filed for bankruptcy and liquidated.

I think the "winter coat" analogy is a bit misleading in that buying a winter coat in the summer makes sense as, presumably, it's a perfectly good coat with a lower price off-season.  But stocks are much different, as that "coat" (stock) is likely not "perfectly good", or the price wouldn't be where it is.

Let me conclude by saying that no one should invest in any stock unless they could easily withstand a substantial, or total, loss of the money invested.

Disclaimer: The preceding was presented for purposes of education and casual conversation.  They should not be considered a recommendation for or against any securities, an offer to buy or sell securities or a solicitation.

Edited December 3, 2022 by Stockjock

[DirtyDawg]

34 minutes ago, Stockjock said:

Let me conclude by saying that no one should invest in any stock unless they could easily withstand a substantial, or total, loss of the money invested.
 

Perhaps we should also say "no one should invest in crypto unless they could easily withstand a substantial, or total, loss of the money invested" too! 💥

 

Although using the terms invest and crypto in the same sentence is a wee bit of a stretch. 😉

 

Edited December 3, 2022 by DirtyDawg

[DirtyDawg]

1 hour ago, NMTraveller said:

Any idea when RCL will start making money?  They are losing it rather quickly right now.

Do you mean making an accounting profit or generating a positive cash flow? These are two very different things. 

[marieps]

1 hour ago, Stockjock said:

Since I am with a big Wall Street firm, I can't comment on any stocks directly or offer advice on what to buy or sell.  With that said...

Typically, when stocks are beaten down badly, it is for good reason.  Sometimes, they stay at those levels, go even lower, or even disappear.  

When companies file for bankruptcy, often, but not always, there is a reorganization where the shareholder equity is wiped out and investors may lose all of their money.  There are a number of well-known companies, several airlines immediately come to mind, that have done this, left shareholders holding the bag, reorganized, and then issued new stock.  But that new stock often did no good for their old stock owners, who were typically wiped out.

It is a double-edged sword, in that you can have substantial swings in the stock prices, but there is always a direct correlation between risk and reward.   Always.

As noted elsewhere, this is a tremendously expensive industry to operate, and their business was decimated for at least a couple of years.  While trends are improving considerably, many of these companies have taken on a lot of debt to remain afloat, pardon the pun.

I've purchased companies' shares with beaten down prices and it's worked out well at times and poorly at times.  I bought different companies in the travel and leisure sector during the E-Bola crisis and Covid crisis.  Those were high risk trades, but I understood that and most have worked out well.  I also bought Lehman during the financial crisis of 2008 and lost all of my money when they filed for bankruptcy and liquidated.

I think the "winter coat" analogy is a bit misleading in that buying a winter coat in the summer makes sense as, presumably, it's a perfectly good coat with a lower price off-season.  But stocks are much different, as that "coat" (stock) is likely not "perfectly good", or the price wouldn't be where it is.

Let me conclude by saying that no one should invest in any stock unless they could easily withstand a substantial, or total, loss of the money invested.

Disclaimer: The preceding was presented for purposes of education and casual conversation.  They should not be considered a recommendation for or against any securities, an offer to buy or sell securities or a solicitation.

You must have nailed the safe harbor question on the exam.  Well done.

[grandgeezer]

 

2 hours ago, DirtyDawg said:

I would never mention shareholder obc because I couldn't care less about that stuff.  Perhaps because I've never invested in RCL - only speculated in it from time to time. 😉 

 

The value of the underlying assets might not change dramatically or quick but the price (note,I didn't say value) of the stock can be, and has been very volatile. Heck, the darn thing is up 60% in two months. Of course it could be down 60% in the next two months. Now that is volatile with a capital V!

 

BTW, @Kilroyshere analogy about the winter coat is one that has been used by contrarian investors for a very long time.  

 

According to what I could find, RCL stock closed at $60.51 yesterday. two months ago it closed at $37.59. Old school math tells me that’s a rise of about 38%, but if you want to round it up to 60%, have at it.

[DirtyDawg]

8 minutes ago, grandgeezer said:

 

According to what I could find, RCL stock closed at $60.51 yesterday. two months ago it closed at $37.59. Old school math tells me that’s a rise of about 38%, but if you want to round it up to 60%, have at it.

$60.51 -$ 37.59 = a gain of $22.92

$22.92/$37.59 = 61%

 

Better get you abacus tuned up. 😁

 

[Kilroyshere]

12 minutes ago, grandgeezer said:

 

According to what I could find, RCL stock closed at $60.51 yesterday. two months ago it closed at $37.59. Old school math tells me that’s a rise of about 38%, but if you want to round it up to 60%, have at it.

Hmmm...

 

I'm older school math.

 

Buy a share of RCL for $37.59.

 

Sell a share of RCL for $60.51

 

Realize a profit of $22.92.

 

That $22.91 profit on a $37.59 investment = 61% on my abacus.

[d9704011]

Just now, Kilroyshere said:

I'm older school math.

'New math' would arrive at the same conclusion.

[Kilroyshere]

3 hours ago, Stockjock said:

Since I am with a big Wall Street firm, I can't comment on any stocks directly or offer advice on what to buy or sell.  With that said...

...I think the "winter coat" analogy is a bit misleading in that buying a winter coat in the summer makes sense as, presumably, it's a perfectly good coat with a lower price off-season.  But stocks are much different, as that "coat" (stock) is likely not "perfectly good", or the price wouldn't be where it is.

Them were a lotta words to say...I'm not sure what you tried to say, but you said it in fine Wall St. fashion lacking brevity!

 

As for the winter coat analogy, I stole that line from old Warren Buffet himself, the king of Graham & Dodd Value investing. It's a very operative and simple investment theory that requires no Wall St. middleman.

Edited December 3, 2022 by Kilroyshere

[Kilroyshere]

4 minutes ago, d9704011 said:

'New math' would arrive at the same conclusion.

I was referring to GrandGeezer who claimed my 'old school math' was wrong in the original post I made about the gain on RCL, NCLH and CCL shares.

[NMTraveller]

2 hours ago, DirtyDawg said:

Do you mean making an accounting profit or generating a positive cash flow? These are two very different things. 

Earnings so that their P/E ratio is not negative.

[BermudaBound2014]

3 hours ago, Stockjock said:

Let me conclude by saying that no one should invest in any stock unless they could easily withstand a substantial, or total, loss of the money invested.
 

 

This^

 

This x 100 if you're specifically talking cruise line stock. 

[DirtyDawg]

1 hour ago, Kilroyshere said:

Them were a lotta words to say...I'm not sure what you tried to say, but you said it in fine Wall St. fashion lacking brevity!

 

As for the winter coat analogy, I stole that line from old Warren Buffet himself, the king of Graham & Dodd Value investing. It's a very operative and simple investment theory that requires no Wall St. middleman.

C'mon what does old Warren know about value investing? Now that young Sam Bankman-Fried hotshot knows value investing! 😉

 

Edited December 3, 2022 by DirtyDawg

[intr3pid]

The difference between the cruise line stocks and the speculative kind is a bit more subtle.  The cruise lines are a terrific secular growth story.  And a 3.5-player oligopoly.  A high-quality coat, so to speak. 

 

But why was this high-quality coat still unsold?  The debt load and inflation would come to mind.  And in the last 3-4 months, both concerns have eased up somewhat.  So much so that CCL was able to convince lenders to give it more. 

 

That said, $60 is in no man's land. 

[Stockjock]

1 hour ago, Kilroyshere said:

Them were a lotta words to say...I'm not sure what you tried to say, but you said it in fine Wall St. fashion lacking brevity!

 

As for the winter coat analogy, I stole that line from old Warren Buffet himself, the king of Graham & Dodd Value investing. It's a very operative and simple investment theory that requires no Wall St. middleman.

As the expense of belaboring the point, I interpret Buffet's (sic) "winter coat" analogy differently.

 

Your apparent interpretation:

Buy when prices are down regardless of why they're down.  Even if some of those companies have issued "going concern" warnings (i.e. bankruptcy as a possibility).

My interpretation:

Buy when damned near *everything* is down, due to recession or other factors.  Buy diversified, but generally strong companies, in a good financial condition, to take advantage of temporary low prices.

Big difference.

Edited December 3, 2022 by Stockjock

[DirtyDawg]

19 minutes ago, intr3pid said:

The difference between the cruise line stocks and the speculative kind is a bit more subtle.  The cruise lines are a terrific secular growth story.  And a 3.5-player oligopoly.  A high-quality coat, so to speak. 

 

But why was this high-quality coat still unsold?  The debt load and inflation would come to mind.  And in the last 3-4 months, both concerns have eased up somewhat.  So much so that CCL was able to convince lenders to give it more. 

 

That said, $60 is in no man's land. 

That CCL debt was issued at a yield of 10.75% . They call those bonds Junk bonds.

 

 

[DirtyDawg]

1 hour ago, NMTraveller said:

Earnings so that their P/E ratio is not negative.

For high financial and operating leverage companies like cruise lines I don't look at EPS and P/E's. But barring a recession in 2023 the consensus seems to be they will in the black with accounting earnings late next year. Of course, Wall Street earnings estimates are known to be tilted to the optimistic side. So take the consensus estimate with a grain or 2 (hundred) of salt.  😁

[Stockjock]

19 minutes ago, DirtyDawg said:

That CCL debt was issued at a yield of 10.75% . They call those bonds Junk bonds.

 

 

I believe Carnival's credit ratings are B2 and are on watch for potential downgrade by Moody's.

For those unfamiliar:

The best credit rating is AAA (S&P) or Aaa (Moodys).

The chart I've attached will help explain how credit ratings work, and to my knowledge, S&P and Moodys are the best known and most widely used of the credit rating services.  As before, this is presented only to educate and for the purpose of casual conversation and is not a recommendation for or against any company, Carnival or otherwise.

As you can see, a B2 rating would be considered "highly speculative".  

Do bear in mind that in a bankruptcy, bondholders, in my experience, typically have a higher level of recovery than stockholders, as common stock, aka equities, are typically subordinated to debt under those conditions.  And often, various bonds themselves are "senior" or "junior" to other bonds, depending on how they were issued/structured.

 

Edited December 3, 2022 by Stockjock

[DirtyDawg]

And for the nautically minded,  just picture in your mind a sinking Chinese Junk,  and you will get the idea of what a Junk bond is. 😁

 

 

 

 

[DirtyDawg]

18 minutes ago, Stockjock said:

I believe Carnival's credit ratings are B2 and are on watch for potential downgrade by Moody's.
 

And knowing the Credit Ratings Agencies, about six months too late. 

[Kilroyshere]

1 hour ago, intr3pid said:

The difference between the cruise line stocks and the speculative kind is a bit more subtle... 

 

At some point, almost every equity, debt and venture has it's day as pickers deemed them speculations at times and investments at other times.

[NMTraveller]

1 hour ago, DirtyDawg said:

For high financial and operating leverage companies like cruise lines I don't look at EPS and P/E's. But barring a recession in 2023 the consensus seems to be they will in the black with accounting earnings late next year. Of course, Wall Street earnings estimates are known to be tilted to the optimistic side. So take the consensus estimate with a grain or 2 (hundred) of salt.  😁

They earlier estimated second half of this year ... 🙂  Anyways I am not believing  the time estimate.  2024 or 2025 perhaps?