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Good time to buy Carnival shares for the perks? And cheap cruises?


Harry Peterson
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Although the share price continues to drop like a stone (£20.53 at the moment) the dividend remains the same at $0.50 per share. This is converted to sterling as 39.1057 pence per share and paid on 13 March.

https://www.prnewswire.com/news-releases/carnival-corporation--plc-announces-exchange-rate-for-quarterly-dividend-301014617.html

Brian

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3 minutes ago, BrianI said:

Although the share price continues to drop like a stone (£20.53 at the moment) the dividend remains the same at $0.50 per share. This is converted to sterling as 39.1057 pence per share and paid on 13 March.

https://www.prnewswire.com/news-releases/carnival-corporation--plc-announces-exchange-rate-for-quarterly-dividend-301014617.html

Brian

 

The dividend was decided a while ago and before the current situation had escalated.  The next dividend announcement will be the one to watch. 

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This has to be the classic warning not to buy shares just for the perks.  £53+ in August 2017 and £23 now.  £3000 is a hefty loss for anyone who bought at the peak.  I'm even begining to wonder how Carnival is going to survive this.  Very few people want to be on a cruise ship over the next few months.

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1 minute ago, Tommart said:

This has to be the classic warning not to buy shares just for the perks.  £53+ in August 2017 and £23 now.  £3000 is a hefty loss for anyone who bought at the peak.  I'm even begining to wonder how Carnival is going to survive this.  Very few people want to be on a cruise ship over the next few months.

At the current share price they represent a very good buy for the perks, especially if you do more than 2 cruises pa with a Carnival cruise line. Where else can you get a 15% return on your investment. (2 cruises pa minimum 13nts each.)

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13 minutes ago, terrierjohn said:

At the current share price they represent a very good buy for the perks, especially if you do more than 2 cruises pa with a Carnival cruise line. Where else can you get a 15% return on your investment. (2 cruises pa minimum 13nts each.)

Add in the annual dividend of circa £156 then it’s around 22%. However, there is a possibility that the future dividend maybe reduced, even to zero as it did a few years ago in 2009.

Brian

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53 minutes ago, Tommart said:

This has to be the classic warning not to buy shares just for the perks.  £53+ in August 2017 and £23 now.  £3000 is a hefty loss for anyone who bought at the peak.  I'm even begining to wonder how Carnival is going to survive this.  Very few people want to be on a cruise ship over the next few months.

 

Slightly pessimistic there.  With the current situation there was only one way the share price was going to go.  Once the worst of it has blown over, the price will recover.  There's absolutely no reason to suggest that Carnival Corp won't survive this, unless you're expecting every cruise line to go out of business.  

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1 hour ago, davecttr said:

I would expect the shareholder benefits to be reduced as well. I bought at 2200p several years ago and it went below that this morning.

They may well retain, or even improve, them though - just to try to get some customers back!  This whole business is doing so much damage to the reputation of cruising that it will need a major marketing exercise, and some very low prices, to get people back again.  Once confidence is lost in any business it's difficult to get it back again.

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2 hours ago, terrierjohn said:

At the current share price they represent a very good buy for the perks, especially if you do more than 2 cruises pa with a Carnival cruise line. Where else can you get a 15% return on your investment. (2 cruises pa minimum 13nts each.)


I am not sure how many people have the appetite for two lengthy cruises pa in the current climate...


The professionals recommend steering well clear of all transport shares at the moment. I certainly don’t see anyone advising purchasing them for the (modest) obc on offer...

 

https://apple.news/Al4JwtP2tTlqZylxDR_cPpQ

 

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10 minutes ago, Tommart said:

They may well retain, or even improve, them though - just to try to get some customers back!  This whole business is doing so much damage to the reputation of cruising that it will need a major marketing exercise, and some very low prices, to get people back again.  Once confidence is lost in any business it's difficult to get it back again.

 

But all holidays are being hit.  It's not like the Costa incident, where people are specifically put off cruising for a period of time.  The virus is putting people off travelling for any sort of holiday.  Obviously, the highly publicised incidents on the two Princess ships doesn't help, but I really don't think it'll put people off cruising once the panic has subsided and life has got back to normal.  

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2 hours ago, terrierjohn said:

At the current share price they represent a very good buy for the perks, especially if you do more than 2 cruises pa with a Carnival cruise line. Where else can you get a 15% return on your investment. (2 cruises pa minimum 13nts each.)

Depends on how much you value your life? Cruising is not the safest activity at this moment in time. Even P&O on facebook have said 'We have a limited number of final beds on P&O Cruises'!!!!

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4 hours ago, Eddie99 said:

Here’s “Motley Fool”, a respected finance website, being quite positive about share purchase now

 

https://www.fool.co.uk/investing/2020/03/06/ftse-100-dividend-stock-carnival-has-crumbled-30-heres-what-id-do-now/

 

Warning:  Shares can go down as well as up

Good article. I'm a fan of Motley Fool and it often gives good tips.

As the article infers ' this too shall pass' and states what a robust company Carnival is, so a punt at current share price is maybe not a bad thing.

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I'm sitting on quite a significant paper loss at the moment, but my feeling (!) is that in 5 years time the share price will be back to the same level as when I puchased my shares. Over those 5 years the dividends will have been considerably higher than any interest bearing account,  and if I do go on any further cruises, the obc will be icinng on the cake.

Having said that, I'm glad I'm glad I've got 100 shares!

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8 hours ago, wowzz said:

I'm sitting on quite a significant paper loss at the moment, but my feeling (!) is that in 5 years time the share price will be back to the same level as when I puchased my shares. Over those 5 years the dividends will have been considerably higher than any interest bearing account,  and if I do go on any further cruises, the obc will be icinng on the cake.

Having said that, I'm glad I'm glad I've got 100 shares!

 

Very similar situation here but I also think the price will recover once the situation has stabilised. 

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9 hours ago, wowzz said:

I'm sitting on quite a significant paper loss at the moment, but my feeling (!) is that in 5 years time the share price will be back to the same level as when I puchased my shares. Over those 5 years the dividends will have been considerably higher than any interest bearing account,  and if I do go on any further cruises, the obc will be icinng on the cake.

Having said that, I'm glad I'm glad I've got 100 shares!

 

and in January you were telling us the share price would go up to £40 on the back of soaring demand for cruises in Asia...

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1 hour ago, funinhounslow said:

 

and in January you were telling us the share price would go up to £40 on the back of soaring demand for cruises in Asia...

Hind sight is a wonderful thing ! However, in the 5 to 10 year time scale, I still stand by my forecast.  Let's revisit the topic in 2030!

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33 minutes ago, wowzz said:

Hind sight is a wonderful thing !

I have been suggesting that buying shares on the basis of “perks” is a terrible idea long before this virus thing blew up. 
 

With respect that’s common sense, not “hindsight”...

 

 For what it’s worth, basing investment decisions on what a share price was yesterday, last week or last year is equally misguided. 

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I believe that Warren Buffett has said that you buy when others are selling and sell when others are buying. It has to be said that human nature makes contrarian investing very difficult as everyone has an inbuilt "Herd mentality" that you have to overcome.

 

The history of stock markets is littered with over-reaction by investors - bubbles form due to overreactions by buyers and sell-offs are too extreme by sellers.

 

It seems that Covid-19 will pass reasonably quickly once it takes hold (I believe it was quoted this week as 95% of cases within a 9 week period). Once the initial waves have cleared people will begin, slowly at first, to start to travel again. I would think that Carnival are one of the lines most likely to survive this short, sharp shock and will come out the other side to fight another day.

 

That said, I only invest in funds rather than individual shares so its highly unlikely I will be buying Carnival shares directly. Given the falls around the world in stock markets I am very much looking forward to buying my next tranche at a significant discount. Its an ill wind...

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My initial investment of 100 shares was at £2300, will all the dividends and onboard credit I have received means they owe me practically nothing. I have another 3 cruises booked this year which will give me another $450 dollars onboard credit (Princess). I decided if they go under £20 a share I will buy another 100, the dividend alone is better than an ISA, in the long term I expect them to go back up to to twice what I paid for them.

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On ‎3‎/‎6‎/‎2020 at 12:22 PM, cruisenewbie1976 said:

 

Slightly pessimistic there.  With the current situation there was only one way the share price was going to go.  Once the worst of it has blown over, the price will recover.  There's absolutely no reason to suggest that Carnival Corp won't survive this, unless you're expecting every cruise line to go out of business.  

 

I'd be amazed if Carnival don't remove the dividend for a period of time until they recover from the substantial losses from this situation.  I also don't any longer share the views of those who think this is all a short term blip which will "blow over" and see the Carnival SP rise back up to £30 levels.

 

What we have here is a total game changer of a virus and it's completely down to how cruise lines are forced to react to cases of COVID-19 on-board.   We all cruise very happily knowing that there may be Norovirus on a ship.  That's because if someone gets it, ONLY THAT PERSON gets quarantined in order to stop further spread.   With COVID-19 it's completely different, because EVERY PASSENGER gets quarantined if just one person gets the virus.  It is this single damning situation that will ensure that the cruising industry loses an absolute ton of business going forward for a great deal of time and possibly indefinitely.

 

This virus is not going to go away imho.  It will keep spreading and be as habitual as Influenza.   We will all have to come to terms with the fact that it's going to be permanently with us and may even mutate as Influenza does.

 

This means that for years to come, anyone cruising is going to have to run the risk that someone on the ship gets the virus resulting in everybody being quarantined and thus destroying their cruise.   That situation is imho going to permanently be the proverbial albatross around the neck of the cruise industry.

 

There is only one way to avoid that on-going disastrous situation and that is to agree with the CDC/WHO a different set of response protocols that do NOT result in every passenger being quarantined.  It's a simple binary decision.   If they insist on quarantining everyone when there is a confirmed case on-board, then many people will simply no longer cruise at all.  If they find an alternative response protocol that leaves passengers free to enjoy their cruise then all will be well.

 

The ball is very much in their court.

 

However I can't see them resolving this in the near future.  This problem will persist throughout 2020 imho and into 2021 so I expect the Carnival SP to continue it's southward tend and stay suppressed for quite a while.  Just my opinion.

 

.

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12 minutes ago, KnowTheScore said:

 

I'd be amazed if Carnival don't remove the dividend for a period of time until they recover from the substantial losses from this situation.  I also don't any longer share the views of those who think this is all a short term blip which will "blow over" and see the Carnival SP rise back up to £30 levels.

 

What we have here is a total game changer of a virus and it's completely down to how cruise lines are forced to react to cases of COVID-19 on-board.   We all cruise very happily knowing that there may be Norovirus on a ship.  That's because if someone gets it, ONLY THAT PERSON gets quarantined in order to stop further spread.   With COVID-19 it's completely different, because EVERY PASSENGER gets quarantined if just one person gets the virus.  It is this single damning situation that will ensure that the cruising industry loses an absolute ton of business going forward for a great deal of time and possibly indefinitely.

 

This virus is not going to go away imho.  It will keep spreading and be as habitual as Influenza.   We will all have to come to terms with the fact that it's going to be permanently with us and may even mutate as Influenza does.

 

This means that for years to come, anyone cruising is going to have to run the risk that someone on the ship gets the virus resulting in everybody being quarantined and thus destroying their cruise.   That situation is imho going to permanently be the proverbial albatross around the neck of the cruise industry.

 

There is only one way to avoid that on-going disastrous situation and that is to agree with the CDC/WHO a different set of response protocols that do NOT result in every passenger being quarantined.  It's a simple binary decision.   If they insist on quarantining everyone when there is a confirmed case on-board, then many people will simply no longer cruise at all.  If they find an alternative response protocol that leaves passengers free to enjoy their cruise then all will be well.

 

The ball is very much in their court.

 

However I can't see them resolving this in the near future.  This problem will persist throughout 2020 imho and into 2021 so I expect the Carnival SP to continue it's southward tend and stay suppressed for quite a while.  Just my opinion.

 

.

I totally disagree, from all the information given out by health officials, once you have had Covig19 your immune system should give you protection from re infection, and even if it mutated you will have the same protection as you currently have from normal flu. 

The reason for the current concerns is entirely due to it being a novel virus, next year it will just be a standard flu virus.

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13 minutes ago, terrierjohn said:

I totally disagree, from all the information given out by health officials, once you have had Covig19 your immune system should give you protection from re infection, and even if it mutated you will have the same protection as you currently have from normal flu. 

The reason for the current concerns is entirely due to it being a novel virus, next year it will just be a standard flu virus.

 

If you follow through your thinking though it means you need EVERYONE to have caught the virus to then be safe on a cruise ship.  Until that is the case, you still have the major problem that when just ONE person gets the virus on-board then everyone else gets quarantined which = game over for that cruise.

 

Also worth noting that various people have already been confirmed having caught the virus twice I believe.

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3 minutes ago, KnowTheScore said:

 

If you follow through your thinking though it means you need EVERYONE to have caught the virus to then be safe on a cruise ship.  Until that is the case, you still have the major problem that when just ONE person gets the virus on-board then everyone else gets quarantined which = game over for that cruise.

 

Also worth noting that various people have already been confirmed having caught the virus twice I believe.

I think that turned out to be reporting errors?

 

However COVID-19 is a game changer which will impact all our lives. Why are governments reacting the way they are? because this virus has the potential to wreak havoc. Being a virus it can mutate during its replication phase in the human cell, some of those thousands to hundreds of thousands of new virus will have mutations in their genetic code, some benign, some deadly. It is just too soon to assess how long this is going to last.

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