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

[Tommart]

3 hours ago, Burgmeister said:

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 may prove to be a correct analysis, who knows?  But a travel commentator with international expertise said today that things are starting to pick up in China, with some confidence starting to return - even to the extent of holiday and travel bookings starting again.

 

Early days, but give it a year or so......

[cruisenewbie1976]

1 hour 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.

 

.

 

You're not seriously saying that this quarantine situation will go on indefinitely?

Yes, I totally agree that the virus could be something that we have to live with. But they will have created a vaccine and it'll be no different to flu. Some people will still get it and it may continue to make some people ill but they'll be a tiny minority. 

This is a blip and everyone will be keen to get back to normality asap once the situation has calmed down.

The situation you describe is more akin to an apocalypse. 

[KnowTheScore]

2 hours ago, cruisenewbie1976 said:

 

You're not seriously saying that this quarantine situation will go on indefinitely?

Yes, I totally agree that the virus could be something that we have to live with. But they will have created a vaccine and it'll be no different to flu.

 

People still get Flu every year in their 1000s despite any vaccine.  So what are you suggesting?   You'll still always have the risk that some people will get COVID-19 and when they do, well it's currently cruise over for everyone else.   So why would today's situation be any different to this time next year?

 

They have to make a decision to either let the virus run and people deal with it as they do with Flu (with all the casualties that comes with it) or to keep going with the existing rigorous quarantining process, in which case the cruise industry is stuffed.

 

 

[cruisenewbie1976]

4 minutes ago, KnowTheScore said:

 

People still get Flu every year in their 1000s despite any vaccine.  So what are you suggesting?   You'll still always have the risk that some people will get COVID-19 and when they do, well it's currently cruise over for everyone else.   So why would today's situation be any different to this time next year?

 

They have to make a decision to either let the virus run and people deal with it as they do with Flu (with all the casualties that comes with it) or to keep going with the existing rigorous quarantining process, in which case the cruise industry is stuffed.

 

 

 

Because at the moment they're trying to avoid everyone having it at the same time and also trying to contain it, to a degree. It's a new virus that currently has no vaccine. The longer they can delay the peak, the more time it gives them to work on an effective treatment. 

They'll let the virus run once it's under control. Once more people have had it than haven't, it'll be pointless quarantining anyone. If they continued down that road, there would be very few places in the world that weren't under some sort of quarantine. It's just not logical or feasible to think that it's a realistic option for any longer than a few weeks/months.

I'm sure this is a worrying situation for lots of people, without senseless scaremongering. 

[terrierjohn]

3 hours ago, Tommart said:

That may prove to be a correct analysis, who knows?  But a travel commentator with international expertise said today that things are starting to pick up in China, with some confidence starting to return - even to the extent of holiday and travel bookings starting again.

 

Early days, but give it a year or so......

I think that should read a few months, just my opinion of course but I was correct about the millennium bug, and I look like being right about Brexit.  Follow the sage.

[majortom10]

People die every year from flu and they dont isolate cruise ships if one person on there has the flu. Once there is a vaccination for Covid-19 then in future they will let it run its course exactly the same as flu and some will continue to die especially the old and those with underlying health problems just like they do with flu.

[majortom10]

1 minute ago, terrierjohn said:

I think that should read a few months, just my opinion of course but I was correct about the millennium bug, and I look like being right about Brexit.  Follow the sage.

What a genius you should run the country.

 

[terrierjohn]

4 minutes ago, majortom10 said:

What a genius you should run the country.

 

Glad you agree majortom, maybe you could put a good word in to Dominic Cummings for me?😏

[wowzz]

37 minutes ago, terrierjohn said:

Glad you agree majortom, maybe you could put a good word in to Dominic Cummings for me?😏

Terrier- you can run the country. You would do a far better job than any one else has done for the past 40 years! 

The anxiety gripping the nation, causing panic buying of loo rolls, is due to a virus that has caused the death of 2 (yes 2) people who were already ill.  

Come on people - I lived through the great freeze of 1963 - how is this worse? 

[Tommart]

8 hours ago, wowzz said:

Terrier- you can run the country. You would do a far better job than any one else has done for the past 40 years! 

The anxiety gripping the nation, causing panic buying of loo rolls, is due to a virus that has caused the death of 2 (yes 2) people who were already ill.  

Come on people - I lived through the great freeze of 1963 - how is this worse? 

You've not noticed the Italian situation then? Or the comments of our Chief Medical Officer?  We look very much to be on the same trajectory as Italy, which started off with 3 cases and within two weeks had 3000.

 

"The death toll in Italy has passed 230, with officials reporting more than 36 deaths in 24 hours. The number of confirmed cases jumped by more than 1,200 to 5,883 on Saturday."

 

"Prof Whitty (Chief Medical Officer) said modelling suggests that 50 per cent of cases in the UK will probably happen during a three-week period and 95 per cent within a nine-week period, potentially resulting in high numbers of cases “way over-topping the ability of the NHS to put everyone in beds”."

[terrierjohn]

I accept that it will be impossible for the NHS to operate normally if, as predicted, there could be many thousands needing hospitalization. But I am convinced we will cope, we always do in any crisis, it may end up as a very makeshift coping system, but make no mistake it will cope as best it can.

So please can we all stop looking for armageddon, it won't happen just yet.

[davecttr]

32 minutes ago, terrierjohn said:

I accept that it will be impossible for the NHS to operate normally if, as predicted, there could be many thousands needing hospitalization. But I am convinced we will cope, we always do in any crisis, it may end up as a very makeshift coping system, but make no mistake it will cope as best it can.

So please can we all stop looking for armageddon, it won't happen just yet.

Armageddon maybe in a couple of months time. Apparently the government are planning for it but know the NHS can't cope. (Sunday Times)

 

Be prudent and follow the official advice and don't bother drinking bleach, it won't cure you and will probably kill you! Stick to beer, or gin.

[funinhounslow]

On 3/6/2020 at 7:03 PM, jake 26 said:

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.

I’m not so sure. 
 

“They were £50 a couple of years ago, they’re bound to get up there again eventually” doesn’t seem that smart an investment strategy...

[majortom10]

I think if you cruise twice a year with a Carnival group cruise line then for an investment of £2000 you have $250/£150 per 14 nt cruise and dividends you wouldnt get anywhere near that in return at any bank/building society. But the gamble is will they fall much further and then you might wished you had waited but then again they might start rising and you will have missed the boat. Personally I think if you do or are planning to do many cruises over the next few years then for a £2000 punt its worth the risk.

[jake 26]

18 minutes ago, funinhounslow said:

I’m not so sure. 
 

“They were £50 a couple of years ago, they’re bound to get up there again eventually” doesn’t seem that smart an investment strategy...

Agreed, but they are currently knocking around the £20 - £22 level, and I think it's reasonable to assume they would rise to £30+ in due course, a 50% gain.

[Monorail Orange]

I've realised that I don't spend nearly enough on OBC to make any use of the benefit. Oh well...

 

Well done to anyone who has been able to make the most of this temporary drop in prices.

[Eddie99]

Unless you are buying them to sell at a profit in the short term,  I think it’s worthwhile for every regular cruiser to look at share purchase

At the moment a £2000 investment nets you the OBC detailed previously, together with quarterly dividends of about £40.  (These may be curtailed for a while if the cruise industry is hard hit by Coronavirus.)

However, it doesn’t take many years to recoup the initial investment.  2 x 14 night cruises pa x 7 years and you’re ‘in profit’.  Don’t sell your shares, leave them in your will - your beneficiaries will get whatever the shares are then worth - £2000, £5000, whatever.

 

Always remember shares can go down as well as up, always remember the shareholder obc might be reduced/withdrawn (unlikely, methinks) and don’t buy shares you can’t afford.  If you have £2000 gathering 1%pa in an ISA, Carnival shares feel a better investment to me.

 

But take care.  Don’t risk money you can’t afford to lose

[funinhounslow]

35 minutes ago, majortom10 said:

I think if you cruise twice a year with a Carnival group cruise line then for an investment of £2000 you have $250/£150 per 14 nt cruise and dividend

Plus the cost of the cruise...
 

Spend a four figure sum on a holiday and they bung you the equivalent of a couple of pints a day. Is it really that good of a deal? 

[wowzz]

1 hour ago, funinhounslow said:

Plus the cost of the cruise...
 

Spend a four figure sum on a holiday and they bung you the equivalent of a couple of pints a day. Is it really that good of a deal? 

But if you were going on the cruise anyway?

[terrierjohn]

1 hour ago, funinhounslow said:

Plus the cost of the cruise...
 

Spend a four figure sum on a holiday and they bung you the equivalent of a couple of pints a day. Is it really that good of a deal? 

Yes of course. We would be cruising anyway so the extra OBC is very worthwhile. We bought ours at £18 in 2012 and are now well in profit.

[cruisenewbie1976]

1 hour ago, funinhounslow said:

Plus the cost of the cruise...
 

Spend a four figure sum on a holiday and they bung you the equivalent of a couple of pints a day. Is it really that good of a deal? 

 

That's a strange way to look at it. I'd imagine most people who have shares and get extra obc would have booked their cruise whether they had shares or not!

Edited March 8, 2020 by cruisenewbie1976
Typo

[crompton21]

If you value a company based on what it was once worth, then this may be the time to buy.  A bit like signing Wayne Rooney today because he was worth X million in 2013.

The last few years slow reduction in share price (prior to this years covid collapse) reflects the result of a reducing free cash flow metric and continued expansion of long term debt.  Long term debt is about $10.5 billion with a further very significant amount of expenditure in the pipeline.  There appear to be covenants attached to their borrowings which the current situation may have a genuine effect upon, the consequences of which (as stated in Carnival's accounts) are:

 

"Generally, if an event of default under any debt agreement occurs, then pursuant to cross default acceleration clauses, substantially all of our outstanding debt and derivative contract payables could become due, and all debt and derivative contracts could be terminated."

 

Buyer beware....

[funinhounslow]

“Do you fancy trying NCL this year?”

 

No let’s stick with P&O, we get the OBC

 

”Shares are up to £50, maybe we should sell?”

 

We’ve got a cruise coming up, let’s hang on to them...

[funinhounslow]

5 minutes ago, crompton21 said:

If you value a company based on what it was once worth, then this may be the time to buy.  A bit like signing Wayne Rooney today because he was worth X million in 2013.

Beautifully put!

[terrierjohn]

4 minutes ago, funinhounslow said:

“Do you fancy trying NCL this year?”

 

No let’s stick with P&O, we get the OBC

 

”Shares are up to £50, maybe we should sell?”

 

We’ve got a cruise coming up, let’s hang on to them...

You are not restricted to just P&O, you get OBC  on any Carnival cruise line.