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

[crompton21]

23 minutes ago, cruisenewbie1976 said:

 

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!

 

I think that the shareholder benefit is to encourage people to book more cruises. It works very well by the look of it but I don't suppose it is done from the goodness of their heart.

[terrierjohn]

9 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.

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....

But unless the debt owners want to run a cruise line, then the only way to guarantee getting all your money back  will be to grant Carnival an extension. Otherwise they are likely to spend eternity trying to flog off all their cruise ships.

[funinhounslow]

4 minutes ago, terrierjohn said:

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

My point is that a Carnival shareholder will likely be minded to book with a Carnival brand rather than a competitor ... which is why I used NCL as an example 

[Tommart]

9 hours 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.

Sorry, but just how exactly do you think the NHS will cope, given that the Chief Medical Officer said this:

 

"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".

 

Where will the ICU beds come from, where will the staff for them come from (given that 20% may be off sick) and the ventilators?  They can't be magicked up from nowhere.  Even the government is working on the likely scenario of 100,000 deaths - and that's the planning figure given to local authorities.

 

This is what happens when you run the NHS down over 10 years.

[terrierjohn]

2 minutes ago, funinhounslow said:

My point is that a Carnival shareholder will likely be minded to book with a Carnival brand rather than a competitor ... which is why I used NCL as an example 

We have also sailed Celebrity and RCL whilst we have been shareholders. But maybe we are not normal.

[crompton21]

2 minutes ago, terrierjohn said:

But unless the debt owners want to run a cruise line, then the only way to guarantee getting all your money back  will be to grant Carnival an extension. Otherwise they are likely to spend eternity trying to flog off all their cruise ships.

 

Or debt for equity, wait for this to clear through and then sell/IPO.  Aston Martin have been through that seven times now I believe.

 

I am pro P & O in general, just trying to flag up that what is still a £2000 investment today currently comes with a degree of unspecified risk that someone jumping in without doing research may expose themselves to.  Shares may well bottom soon and slowly go back up but it isn't guaranteed that will happen (imo).

[wowzz]

32 minutes ago, terrierjohn said:

But unless the debt owners want to run a cruise line, then the only way to guarantee getting all your money back  will be to grant Carnival an extension. Otherwise they are likely to spend eternity trying to flog off all their cruise ships.

The same as when you owe a bank £50k, it's your problem, if you owe a bank £million,  it's the bank's problem!

[davecttr]

38 minutes ago, Tommart said:

Sorry, but just how exactly do you think the NHS will cope, given that the Chief Medical Officer said this:

 

"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".

 

Where will the ICU beds come from, where will the staff for them come from (given that 20% may be off sick) and the ventilators?  They can't be magicked up from nowhere.  Even the government is working on the likely scenario of 100,000 deaths - and that's the planning figure given to local authorities.

 

This is what happens when you run the NHS down over 10 years.

They will cope well until demand for beds including any extra ones they create exceeds supply then the proverbial will hit the fan. If and when will this come? Apparently the NHS has about 170,000 beds and NHS England has about 4000 intensive care beds, all the beds have high occupancy figures already. With about 20% of diagnosed patients needing hospital admission the stuff will be hitting the fan if we get to about 100,000 confirmed cases, maybe late April or early May. Lets hope it does not happen.

 

apparently china with its bad health care system has about 4 beds per 1000 population. We have just over 2.5 per thousand. 67 million divided by 170 thousand equals 2.537

Edited March 8, 2020 by davecttr

[crompton21]

Acknowledging that this is a particularly difficult time for cruise lines, a little piece of statistics regarding share price performance might help the obc argument.

Data from 01/01/15 to 06/03/20.

Share 1 IGUS-an etf that owns all 500 companies in the s&p 500 and is hedged to avoid currency changes (Carnival is dual listed but essentially an American company).

01/01/15 price £47.19 06/03/20 price £70.58 increase 49.5%

Share 2 CCL (lse listing)

01/01/15 price £29.30 06/03/20 price £19.67 decrease 32.9%

 

Cost of share 1 01/01/15 £2930, value today £4380 increase £1450

Cost of share 2 01/01/15 £2930, value today £1967 decrease £963

 

Cost of holding carnival shares v market £2413.  That's almost £500 per year.  

Edited March 8, 2020 by crompton21

[crompton21]

I pressed enter by mistake, approx. £375 dividend to add to the CCL figures.

 

However, it's a valid example of the risk of owning an individual share.

Edited March 8, 2020 by crompton21

[majortom10]

4 hours 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 if you intend to go on the cruises whether you buy the shares or not. I never said anywhere that you should book cruises just to get the shareholder benefit. But for me having cruised since 1997 and purchased the shares many years ago and do 3 cruises every year it has been an amazing purchase and value for money. 

[Tommart]

5 hours ago, jake 26 said:

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.

I took a similar view some years back in a similar situation with Queens Moat Houses.  The shares didn't rise as I expected them to - the company went under.

[davecttr]

As the CDC in the USA has just advised against embarking on cruise ships I wonder what will happen to Carnivals share price when the markets open tomorrow

[jake 26]

3 hours ago, Tommart said:

I took a similar view some years back in a similar situation with Queens Moat Houses.  The shares didn't rise as I expected them to - the company went under.

 

you win some, you lose some.

 

There are a few shares around at the moment worth a flutter, but who knows what will happen. Some organisations will be stronger because the weaker ones will have fallen, e.g. Easyjet/Flybe could be a case in point.

 

but it's all a gamble.

[wowzz]

3 minutes ago, jake 26 said:

 

you win some, you lose some.

 

There are a few shares around at the moment worth a flutter, but who knows what will happen. Some organisations will be stronger because the weaker ones will have fallen, e.g. Easyjet/Flybe could be a case in point.

 

but it's all a gamble.

To be fair, Flybe was a basket case well before Corona virus. Inept management for many years. Wrong aircraft,  wrong business model, wrong pricing structure. But, fantastic staff. 

[Eddie99]

Carnival on £17.70 at 8.15am and dropping like a stone

 

Unless the cruise industry folds, never to recover, which I feel is extremely unlikely, they’re going to be a huge bargain soon for anyone who doesn’t have them and who plans even one 14 day cruise per annum for the next decade.

 

Don't look for big dividends in the short term though

[funinhounslow]

28 minutes ago, Eddie99 said:

Carnival on £17.70 at 8.15am and dropping like a stone

 

Unless the cruise industry folds, never to recover, which I feel is extremely unlikely, they’re going to be a huge bargain soon for anyone who doesn’t have them and who plans even one 14 day cruise per annum for the next decade.

 

Don't look for big dividends in the short term though

I agree with the bit in bold...

 

Look at the top threads on this board - two about cancelling cruises, and one about a rerouted world cruise. 
 

A recession is likely and booking a cruise is likely to be the last thing on many people’s minds for financial reasons and/or health concerns. 
 

At this rate the only people booking cruises will be Carnival shareholders looking to claw back some value through “free” OBC...

[bodgerday]

16 hours ago, davecttr said:

They will cope well until demand for beds including any extra ones they create exceeds supply then the proverbial will hit the fan. If and when will this come? Apparently the NHS has about 170,000 beds and NHS England has about 4000 intensive care beds, all the beds have high occupancy figures already. With about 20% of diagnosed patients needing hospital admission the stuff will be hitting the fan if we get to about 100,000 confirmed cases, maybe late April or early May. Lets hope it does not happen.

 

apparently china with its bad health care system has about 4 beds per 1000 population. We have just over 2.5 per thousand. 67 million divided by 170 thousand equals 2.537

Local Health authorities will soon start employing "The three wise men" option if things get out of hand. Meaning IC beds will be allocated on a greater % chance of survival basis.

[davecttr]

1 hour ago, bodgerday said:

Local Health authorities will soon start employing "The three wise men" option if things get out of hand. Meaning IC beds will be allocated on a greater % chance of survival basis.

Horrific!

[majortom10]

1 hour ago, bodgerday said:

Local Health authorities will soon start employing "The three wise men" option if things get out of hand. Meaning IC beds will be allocated on a greater % chance of survival basis.

Hasnt the NHS always done that anyway.

 

[terrierjohn]

52 minutes ago, majortom10 said:

Hasnt the NHS always done that anyway.

 

I certainly felt that way when after a stroke, 10 yrs ago, my 66 year old wife was taken to a hospital without 24/7 consultant or CT scan facility. As a result she was left severely disabled, whereas if she had been taken to Leeds it's possible that thrombolitic drugs might have dispersed the clot and led to a significant recovery.

Edited March 9, 2020 by terrierjohn

[Tommart]

1 hour ago, majortom10 said:

Hasnt the NHS always done that anyway.

 

It has, but in 'normal' times it's just about coped, except in winter.  Ten years of cuts have removed staff, beds, and ICU beds though, and it certainly can't cope with the sort of additional demand now predicted.

 

No amount of reassurance from the government can change hard facts, magic up the additional 50,000 nurses the PM keeps talking about, or magic up all the additional ICU beds, ventilators and other equipment needed.

 

I doubt, in fact, whether there are enough trolleys to line people up in corridors!  Or enough corridors!

[davecttr]

Carnival shares hit 1651 30 minutes ago!

[Esprit]

1 hour ago, davecttr said:

Carnival shares hit 1651 30 minutes ago!

Still higher than what I paid for them when they were P&O Princess International PLC shares. Not holding my breath though!

It is what it is!

Will have to rethink my retirement date perhaps. Like as in never! 

[mickrory]

£14 now. Must be worth a punt if they drop below £10.