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Daniel A

Carnival Stock Price Dropping

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I just checked the price of Carnival Corp stock.  It was at $30 and change.  Not so good for a lot of us, but it may be a good time to keep an eye on the stock if you were planning on making a purchase in order to qualify for shareholder OBC.  I'm not really into the stock market so I am not making any suggestion about whether to buy or not, I'm just suggesting that it has gotten pretty low and is worth following.  YMMV.

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The entire market is in the "correction zone," and the travel & leisure sector, notably including the cruise industry, has been hit especially hard over coronavirus concerns, but, despite the criticisms frequently lodged in this forum, I think CCL is a well-managed company and is fundamentally sound. This could be an historic buying opportunity.  Unfortunately, I've never shown a knack for market timing. "Bulls make money, bears make money, but pigs get slaughtered."

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13 minutes ago, Krazy Kruizers said:

Right -- almost all stocks are down -- it has been a bad week for stocks.

 

But things will turn around.

True however I brought this up as there are a lot of people out there who would like to get in on the stockholder benefit but couldn't afford it before.  Might not be a bad time now.  It's about the same price now as buying 50 shares from just a few months ago.

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  • If I had that much extra laying around that I didn't need it sure would be the time to buy.

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At this moment, CCL is  at 32.37. I bought our 100 shares in July 2011 for 34.75. Not exactly a growth stock!

 

Of course, the more cruises we take, the more often we get that $100 nontaxable "dividend".

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18 minutes ago, IPB4IGO said:

At this moment, CCL is  at 32.37. I bought our 100 shares in July 2011 for 34.75. Not exactly a growth stock!

 

Of course, the more cruises we take, the more often we get that $100 nontaxable "dividend".

 

For several years we got that shipboard 4 and 5 times a year.

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As my broker says, it's not "down." It's on sale. 😁 We are in this for the long term so yeah, we have an order in today. 

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Like all the travel stocks it will go up when the fear of travel goes down. Lots of money will be made for those with money to invest.

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As the saying goes would not jump to quickly to grab a falling knife.  Better to pick it up off the floor.

 

For the first time in 11 years I am not holding any CCL stock in my portfolio.  Sold late last week.  Will buy back in once there is some clarification in how bad this might get this year. Current indications are that it will get much worse before it gets better. If it follow cold-flu season type patterns then will probably buy back in a couple of months.  If infection spreads throughout the summer then it could be a very very bad year for cruises.  The problem at this time is a few canceled cruise, plus some closed ports.  If you see additional spread in Europe then the European summer season could easily be a risk.

 

The long term problem is even if this becomes widespread and the current quarantine and port close issues go away, you still have the Diamond Princess demonstration of just how fast this spreads on a cruise ship.

 

Without a summer time drop in infections (cold-flu pattern) cruising might drop off considerably, until their is an effective vaccine next year. In that situation even the big cruise companies would be at risk.

Edited by npcl

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1 hour ago, fatcat04 said:

As my broker says, it's not "down." It's on sale. 😁 We are in this for the long term so yeah, we have an order in today. 

It's a shame that the OBC is only good for the whole cabin, otherwise I'd be buying another hundred shares to put in DW's name...:classic_sad:

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1 hour ago, npcl said:

Sold late last week.  Will buy back in once there is some clarification in how bad this might get this year.

Please help me understand the motivation for active trading CCL like this...

Your going to go on another cruise, your going to own CCL in the future.

Why do you care that today the share price is low? What is gained from not owning it for a period of time?

Unless you have a limit order to buy it back before it climbs above the price you sold it at you run the risk of losing money in the trade. 

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I bought my 100 shares early last year on a dip to $50 and have used the OBC of $250 once, so I'm down a lot.  We know how millions of us love travel and how millions of us love to go by cruise ship, so I'm not selling now even tho it may drop more.  

We don't stop cruising when the flu gets bad, and most of us take precautions to keep healthy onboard anyway.  It may be a great time to buy more, and as soon as my crystal ball clears I'll know when!

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3 minutes ago, mrmoviezombie said:

Please help me understand the motivation for active trading CCL like this...

Your going to go on another cruise, your going to own CCL in the future.

Why do you care that today the share price is low? What is gained from not owning it for a period of time?

Unless you have a limit order to buy it back before it climbs above the price you sold it at you run the risk of losing money in the trade. 

While I have held CCL stock as a long term hold, this virus situation is unique.  When news of the impact on cruises in Asia broke I first sold my shares above 100 (11 years of reinvested dividends), when it became apparent last week of community spread outside of China, I sold the rest of the shares.  I have one cruise this week where I already have the stock benefit.  My next one is August.  I canceled 3 in between.  Depending upon if I decide to keep the cruise booking at last payment date and depending upon the stock price at that time.

 

I expect the situation to worsen for the cruise lines and as such I expect the stock price to drop more before this is over.  So why wouldn't I sell in the short term and actually profit from the down turn instead of taking a paper loss.

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My take - I bought a long time ago and paid more than the current price. At this point the amount I have received in dividends and OBC exceeds my purchase price by a good bit. I still have some cruises left in me, so even more to the good. I'm very happy I bought CCL when I did.

 

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I just added to my holdings at $32. Are we at bottom? Dividend and OBC have already paid handsomely.  Also just booked my winter cruise for coming Fall. I'm all in as they say at poker table.

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How is this virus situation unique? In a year or two everything will be back to "normal", meaning either it was contained or it is just another one of the "minor" flu strains moving around the population. In 10 years it will be a historical footnote. You'll be hard pressed to see the dip in the CCL stock price on the 10 year graph.

 

There only two stock prices that matter, the buy price and sell price. All the quotes in the middle are irrelevant, it doesn't matter if it goes down 10x or up 10x, they have no effect.

 

Are you sure you will buy back in before it rebounds, or do you have a better (risk/reward profile) place to put the money in the mean time?

 

 

 

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I am buying.  Of course it may well fall further but I would/am betting that within 5 years or less it will be back above $60....about double the current price.

 

It's not like CCL is likely to go out of business.  

 

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2 hours ago, mrmoviezombie said:

How is this virus situation unique? In a year or two everything will be back to "normal", meaning either it was contained or it is just another one of the "minor" flu strains moving around the population. In 10 years it will be a historical footnote. You'll be hard pressed to see the dip in the CCL stock price on the 10 year graph.

 

There only two stock prices that matter, the buy price and sell price. All the quotes in the middle are irrelevant, it doesn't matter if it goes down 10x or up 10x, they have no effect.

 

Are you sure you will buy back in before it rebounds, or do you have a better (risk/reward profile) place to put the money in the mean time?

 

 

 

I bought at around  20 in 2009, I sold at 42, I expect to buy back in again sub 30. My total cost of purchase was approximately 2000.  During the time that I held the stock I received dividends that were reinvested and resulted in an additional 43 shares of stock that I had sold for $44 or $1848.  During the time I owned I also received $5900 in OBC.  Thus my initial purchase 11 years ago of 2000 has yielded 4200 + 1848 + 5900 = $11,948.

 

By selling this last week, I now have 6048 in cash (original position plus reinvested dividends) of which I expect to use 3000 or less to re-establish my position.  So in the  simplest terms if things go as I expect I will have more than $2000 in cash after taxes that I would not have had if I just left my money in the stock.

 

In the big picture not much, but better then nothing.

Edited by npcl

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2 hours ago, dockman said:

I am buying.  Of course it may well fall further but I would/am betting that within 5 years or less it will be back above $60....about double the current price.

 

It's not like CCL is likely to go out of business.  

 

Doubt it will go out of business, but the odds of a restructuring of debts, and wipeout of stock in a bankruptcy is certainly a non-zero percentage if this continues to spread and does not follow cold-flu seasonal response.

 

Cruise lines are very capital intensive, low margin businesses that depend on high cash flow.  I reviewed the financial listings a couple of weeks ago and for example CCL has over 4 billion setting on their balance sheets in already paid fares for cruises not yet taken, and only around $500 million in cash.  Any major interruption in cruises and the big lines will have to find very large loans very quickly.

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2 hours ago, mrmoviezombie said:

How is this virus situation unique? In a year or two everything will be back to "normal", meaning either it was contained or it is just another one of the "minor" flu strains moving around the population. In 10 years it will be a historical footnote. You'll be hard pressed to see the dip in the CCL stock price on the 10 year graph.

 

There only two stock prices that matter, the buy price and sell price. All the quotes in the middle are irrelevant, it doesn't matter if it goes down 10x or up 10x, they have no effect.

 

Are you sure you will buy back in before it rebounds, or do you have a better (risk/reward profile) place to put the money in the mean time?

 

 

 

It is unique in that you have a possible pandemic of a new virus for which there is not a vaccine that spreads very quickly in a cruise ship environment (as demonstrated in the Diamond Princess even before quarantine) that has a mortality rate 20 time that of the flu in the over all population, but is much worse in the age groups heavily represented on cruise lines.  The rates in the 80+ of around 14.8%, 70-79 around 8.0% and 60-69 3.6%.

 

All of which does not bode well if this does not follow cold-flu seasonal pattern, and even if it does has the ability to disrupt a substantial number of cruises between now and when we would expect to see if it does drop off when flu season ends.

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Not out of the question CCL could suspend or cut the Dividend, but if one is buying only 100/shares at around $30 to get the OBC that becomes somewhat of a non-issue. Heckuva nice a little 'perk'.

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23 hours ago, dockman said:

It's not like CCL is likely to go out of business.  

 

I agree. 

 

Besides, the entire bull market is quite overdue for a correction.

 

 

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