Carnival Stock

[bemis12]

2 hours ago, Colo Cruiser said:

Only if you sell it.

Selling it merely finalizes the amount of the loss.

[Colo Cruiser]

5 minutes ago, bemis12 said:

Selling it merely finalizes the amount of the loss.

No loss at $250/$100 per cruise.

[ezd222]

19 minutes ago, Colo Cruiser said:

Hmmm............welcome to Cruise Critic.  🤔

 

I had a family member stuck on a ship so I was trying to find information which led to a rabbit hole of research (what I do for a living) as I initially thought there was a price point that could be attractive (ie had a buy order in at $10 which I've pulled).

 

Unfortunately under the hood doesn't look so good when you look at near and mid term projections. Long term they could right the ship, but its going to take time.

 

Do I think they'll survive...yes. Do I think they need a bailout. Necessary. But I do think one of the big three (NCL, CCL, RCI) could collapse.

[Colo Cruiser]

51 minutes ago, ezd222 said:

 

I had a family member stuck on a ship so I was trying to find information which led to a rabbit hole of research (what I do for a living) as I initially thought there was a price point that could be attractive (ie had a buy order in at $10 which I've pulled).

 

Unfortunately under the hood doesn't look so good when you look at near and mid term projections. Long term they could right the ship, but its going to take time.

 

Do I think they'll survive...yes. Do I think they need a bailout. Necessary. But I do think one of the big three (NCL, CCL, RCI) could collapse.

Thanks.  

Well as long as they keep giving me the OBC for my cruises I am happy.

I purchased at $12 many years ago and it has gone as high as $70 per at one point.

I am happy with it regardless.

[oskidunker]

Its a crap shoot, although as one of the largest cruise companies, Carnival could go under. I only hope they support us buying the stock and don't stop the onboard credit. 

[caribill]

1 hour ago, ezd222 said:

 

 

 

Do I think they'll survive...yes. Do I think they need a bailout. Necessary. But I do think one of the big three (NCL, CCL, RCI) could collapse.

 

Do they need bailouts?

 

No.

 

What they need are low cost loans and with the Fed setting their base rate neaer zero, cheap loans will be available.

[JoeU]

1 hour ago, Colo Cruiser said:

No loss at $250/$100 per cruise.

Question: what is the minimum amount of stock you need to own to get the OBC? Might be a good time to get in for this perk alone.

[Colo Cruiser]

1 minute ago, JoeU said:

Question: what is the minimum amount of stock you need to own to get the OBC? Might be a good time to get in for this perk alone.

100 shares

[billco]

8 minutes ago, JoeU said:

Question: what is the minimum amount of stock you need to own to get the OBC? Might be a good time to get in for this perk alone.

https://www.carnivalcorp.com/shareholder-information/shareholder-benefit

[nho9504]

58 minutes ago, Colo Cruiser said:

Thanks.  

Well as long as they keep giving me the OBC for my cruises I am happy.

I purchased at $12 many years ago and it has gone as high as $70 per at one point.

I am happy with it regardless.

 

Only if they continue the OBC.

[nho9504]

39 minutes ago, caribill said:

 

Do they need bailouts?

 

No.

 

What they need are low cost loans and with the Fed setting their base rate neaer zero, cheap loans will be available.

 

Cheap loan may not be available to an industry that now being discovered to have a very large hidden risk and liability. 

 

Not every company can get cheap loan - lenders are no fools, they want their loans be paid back, and the rate is in commensurate to the risk taken.  As someone mentioned upthread on the bonds yields when treasury is now down to 0.36%...

[satxdiver]

CCL stock closed today at $12.59. 😲  If you buy 100 shares ($1259) now, you will get endless OBC ($50 - $250 depending on cruise length) as long as you own it.  CCL also gives quarterly dividends of $0.50/share or $50 if you have 100 shares.  This is an amazing 13.73% yield on dividends alone.   Just remember nothing is guaranteed when holding shares of a public company.

[JLC@SD]

5 minutes ago, satxdiver said:

CCL stock closed today at $12.59. 😲  If you buy 100 shares ($1259) now, you will get endless OBC ($50 - $250 depending on cruise length) as long as you own it.  CCL also gives quarterly dividends of $0.50/share or $50 if you have 100 shares.  This is an amazing 13.73% yield on dividends alone.   Just remember nothing is guaranteed when holding shares of a public company.

With the financial crisis currently at hand, I would expect the dividend to disappear, or at least be cut substantially.  

[Aus Traveller]

Just now, JLC@SD said:

With the financial crisis currently at hand, I would expect the dividend to disappear, or at least be cut substantially.  

I agree with you. I have shares, but don't expect dividends for a while. I will be happy if the company survives.

[satxdiver]

1 hour ago, Colo Cruiser said:

Thanks.  

Well as long as they keep giving me the OBC for my cruises I am happy.

I purchased at $12 many years ago and it has gone as high as $70 per at one point.

I am happy with it regardless.

 

I bought CCL stock in late 2008 for about $12 per share.  The amount of OBC I have received from the stock not only on Princess but Carnival have been very nice.  I have the dividends each quarter reinvested so now I have a bit more than the original 100 shares.  I too have no regrets.  

 

42 minutes ago, oskidunker said:

Its a crap shoot, although as one of the largest cruise companies, Carnival could go under. I only hope they support us buying the stock and don't stop the onboard credit. 

 

If CCL were to go under there would be shock waves all across the world with over 100 ships on the oceans today.  It can of course happen but highly unlikely.  We could see a breakup with various individual cruise lines sold off/spun off to get back to viability. 

 

Offering OBC for small stockholders is a brilliant idea for any cruise line.  It buys more loyalty than any other sales pitch.  I would be surprised if they drop this perk or even decrease it.   

[satxdiver]

7 minutes ago, JLC@SD said:

With the financial crisis currently at hand, I would expect the dividend to disappear, or at least be cut substantially.  

 

That well may happen and CCL has in the past stopped paying dividends to get a better financial position.  While the dividend is nice, I hold the stock to reap the OBC on our several cruises each year.   We are getting over $1000/year OBC right now.  Stock dividends are not guaranteed.

Edited March 18, 2020 by satxdiver

[ezd222]

1 hour ago, Colo Cruiser said:

Thanks.  

Well as long as they keep giving me the OBC for my cruises I am happy.

I purchased at $12 many years ago and it has gone as high as $70 per at one point.

I am happy with it regardless.

 

I'm actually not a cruiser. Took a few with my parents. They love it. It's just not for me.

 

So I didn't evaluate the benefit from a cruise credit POV which I think is a fantastic offer btw if your a cruiser.. Not knocking your intention.  

 

I just did from a purely upside, dividend, viability perspective. The majority of shares are institutional anyway so long-term upside is whats going to make or break this.  

 

Interesting times....

[Colo Cruiser]

10 minutes ago, ezd222 said:

 

I'm actually not a cruiser. Took a few with my parents. They love it. It's just not for me.

 

So I didn't evaluate the benefit from a cruise credit POV which I think is a fantastic offer btw if your a cruiser.. Not knocking your intention.  

 

I just did from a purely upside, dividend, viability perspective. The majority of shares are institutional anyway so long-term upside is whats going to make or break this.  

 

Interesting times....

Yeah I think it's been a great deal. 

You gotta stop going down those rabbit holes.  lol  😁

[blackwd]

+1

I fully agree with this statement, my financial planner called me a week ago and said my gamble on CCL failed and now was time to bail out on my 200 shares while I could get something in return. I trust his judgement, a drop this fast and a questionable short term/long term future does not bode well for CCL or the shareholder OBC.


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[npcl]

2 hours ago, nho9504 said:

 

Cheap loan may not be available to an industry that now being discovered to have a very large hidden risk and liability. 

 

Not every company can get cheap loan - lenders are no fools, they want their loans be paid back, and the rate is in commensurate to the risk taken.  As someone mentioned upthread on the bonds yields when treasury is now down to 0.36%...

Sometimes lenders will lend providing the loan terms give them top priority in case of a BK.  IF one looks at CCL debt  there is over 9 billion in long term liabilities.  Prior to when this started there were also 9 billion in current liabilities including 4.5 billion in customer deposits (I suspect that number is lower now, and some of it is now in FCC's instead of actual cash deposits)

Current portion of long term debt is  around 1.6 billion of which I suspect is the bond referenced below that matures this fall. There was also 231 million in short term borrowing.  I think that applies to the revolving line of credit which is now about 3 billion (The filing also stated that at that time 2.8 billion was available of the 3 billion line so the used portion would correspond nicely with the 231 in short term borrowing.

 

The filing also lists the long term debt as being unsecured.  So it appears as if they did have to restructure it would be unsecured debt so they would have maximum flexibility with their ships.

 

Considering that CCL's existing bond that matures this year now has an over 13% YTM which considering that it was at around 3% YTM last week indicates just how much CCL's credit is worth these days.

 

Today CCL announced that they have drawn down their 3 billion dollar revolving loan and that money is due 6 months from now.  They are going to have to borrow a lot soon or they will need to restructure their debt.  Certainly they will need 4.5 billion by the end of October plus whatever they have burned through in operating expenses by the time they are able to restart.  Their operating expense rate was around 4.4 billion per quarter.  

 

Not impossible, provided they 1. convert most of the passenger deposits to FCC's and limit cash refunds  2. Continue to get some new deposits 3. Minimize expenses (17 billion in annual expenses one analyst estimated that they could not get below 9 billion on an annual basis so that would put their quarterly burn rate at 2.25 billion even with their ships empty). 4. They are able to get back operating 3 months from now.

(interesting how items 1 and 2 corresponds with their leaving future cruises intact to be booked, and their current efforts to get people to take FCC's in place of cash refunds).

 

If this goes 6 months hard to see them being able to avoid restructuring.

 

Will be interesting to see their 10K filing 2-3 weeks from now. 

 

Edited March 18, 2020 by npcl

[ano]

Always remember what sets a stock's price. It just doesn't float around. People buy a stock to benefit from the future earnings of the company going out to infinity, but with the greatest effect near. Its the same reason people buy bonds. 

 

So when a stock price is 1/3 of what it used to be, it means that collectively, investors believe Carnival 1/3 as much profit as it would have before. (Give or take.) So for those hoping the stock will quickly return to where it was before, that will only happen when its earnings outlook will be what it was before.  

 

Now this is ONLY what the financial community believes at any instant in time. They can be wrong in either direction.

 

Carnival is a quite leveraged business, and the cruise business is very competitive. It may return to how it was before the coronavirus, or it may not, and the stock price represents this risk. 

 

Carnival has a large credit line where its currently borrowing from. Nothing wrong with that, but it will need to be paid back. Carnival took the full credit line amount that has to be paid back in 2024. Keep aware of that date because, either Carnival can easily pay the $3B then, or it can't. Time will tell, and the stock will rise or fall depending on how its going toward 2024. 

 

One more thing. People have said they buy the stock for the onboard credit. Fair enough, but there is no guarantee that Carnival will always offer this, and it can be ended any year. If Carnival were to discontinue this perk, that alone might negatively impact the stock price.

 

Oh one more thing, and please take this tip at your own risk....

 

If it was me, I would never buy a stock when its falling. Wait until its firmly in the upward direction. It will not return to its old price immediately, so no giant risk of waiting a bit. Plus there are no cruises to go on now for an onboard credit anyway. 

Edited March 18, 2020 by ano

[npcl]

2 minutes ago, ano said:

Always remember what sets a stock's price. It just doesn't float around. People buy a stock to benefit from the future earnings of the company going out to infinity, but with the greatest effect near. Its the same reason people buy bonds. 

 

So when a stock price is 1/3 of what it used to be, it means that collectively, investors believe Carnival 1/3 as much profit as it would have before. (Give or take.) So for those hoping the stock will quickly return to where it was before, that will only happen when its earnings outlook will be what it was before.  

 

Now this is ONLY what the financial community believes at any instant in time. They can be wrong in either direction.

 

Carnival is a quite leveraged business, and the cruise business is very competitive. It may return to how it was before the coronavirus, or it may not, and the stock price represents this risk. 

 

Carnival has a large credit line where its currently borrowing from. Nothing wrong with that, but it will need to be paid back. Carnival took the full credit line amount that has to be paid back in 2024. Keep aware of that date because, either Carnival can easily pay the $3B then, or it can't. Time will tell, and the stock will rise or fall depending on how its going toward 2024. 

The 10k filing says that the line of credit expired in 2024 with the ability to extend to 2026 with agreement of the banks.

However, In information published  today it was indicated  indicated that the 3B revolving credit line was due in 6 months, not 2024. So while the facility might be there until 2024, there may be limits on how long they can hold the money once it is tapped.  

 

The article in Sea trade news stated

 

The company tapped into an existing revolving credit facility, amended last August, to borrow approximately $3bn for a six-month period

 

.https://www.seatrade-cruise.com/news/carnival-boosts-liquidity-3bn-loan-estimates-net-loss-2020

[Momma Mojito]

After reading all of  these replies.    I know it's a gamble.  Would you buy Carnival stock today  

[Colo Cruiser]

4 minutes ago, Momma Mojito said:

After reading all of  these replies.    I know it's a gamble.  Would you buy Carnival stock today  

 sure would!!

If you snooze you lose.

 

 

[Momma Mojito]

10 minutes ago, Colo Cruiser said:

 sure would!!

If you snooze you lose.

  Thanks I respect your answer!!