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billco

By billco,
in Princess Cruises

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npcl

npcl

Posted
Posted
5 minutes ago, dockman said:

 

So if you buy at $10 and in 5 years it is at $50 that is a nice return.  I have bought more at the 10-15 level and plan to sit tight for 3 to 5 years and see what happens.  If they go bankrupt they won't be alone as there will be hundreds of thousands of other companies doing the same.

Don't buy more than u can afford to lose and if you do buy be patient (unless u fancy yourself as some kind of fearless day trader)

Hundreds of thousands of companies are not having to pay 12.5% (junk bond rates) for senior secured bonds.

 

The cruise industry is being thought of about the same as the oil industry at the moment.

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dockman

dockman

Posted
Posted
5 minutes ago, npcl said:

Hundreds of thousands of companies are not having to pay 12.5% (junk bond rates) for senior secured bonds.

 

The cruise industry is being thought of about the same as the oil industry at the moment.

 

Maybe not but hundreds of thousands of companies are also in deep kim chee.

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Ombud

Ombud

Posted
Posted (edited)

I really wish my tank wasn't full. Gas @ 2.54 in Concord CA.

 

FWIW bought CCL despite dividend going away. Below what I sold it at March 18th. Gotta read up on what that means wash rules-wise. Initially bought at 54.95. Sold at 9. Bought at 8.6. I believe in CCL (kids say I also believe in unicorns 🤮)

 

My bigger issue is losses in stock market, what would happen to the 7600 I've spent on cruises, then got (getting) FCC, booked 1/2 that on 2 Transatlantics, and that going away. Makes 860 minuscule 

 

Our curve is beginning to bend. Holding at 3 deaths / over 200 cases / STAY AT HOME!!!

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bluesea321

bluesea321

Posted
Posted
1 hour ago, npcl said:

The cruise industry is being thought of about the same as the oil industry at the moment.

 

Not quite.  Moody's CCL rating is Baa3 (3/31) with ratings on review for further downgrade.  Chevron is Aa2 and stable (4/1).  Chevron will not go bankrupt, they have been at $20/barrel and lower before, and they and Exxon will rebound.  CCL (and OXY) may not.  I would not want to hold CCL or OXY debt.  Warren Buffett thought he made a good deal with OXY for $10B at 8% but even though his is preferred, there may not be much of OXY left.

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npcl

npcl

Posted
Posted
3 hours ago, bluesea321 said:

 

Not quite.  Moody's CCL rating is Baa3 (3/31) with ratings on review for further downgrade.  Chevron is Aa2 and stable (4/1).  Chevron will not go bankrupt, they have been at $20/barrel and lower before, and they and Exxon will rebound.  CCL (and OXY) may not.  I would not want to hold CCL or OXY debt.  Warren Buffett thought he made a good deal with OXY for $10B at 8% but even though his is preferred, there may not be much of OXY left.

When I refer to the oil industry it is the entire industry  Chevron and Exxon are the two strongest players (actually purchased some Exxon today before the close. However, the rest of the industry is pretty much do not buy and will experience a lot of failures, especially the smaller companies.

 

The point is that even though CCL is  still commercial rated, they had to do a deal at Junk bond rates using the high yield desk of their banker.

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iluvcruzin

iluvcruzin

Posted
Posted
31 minutes ago, MissP22 said:

For us, we're doing about the same amount. The occasional trip to lunch & a quick stop at a few stores has been curtailed but grocery shopping trips might even be more often since they don't always have everything we need each trip.

 

Wow, we're looking at $8 stock price today. Hard to believe. 

I bought 100 around $17 when the market tanked years ago.  Decided to pick up some more when it dipped below $9 yesterday.  It eventually will go up in time.

Not sure why posters are changing the topic to daily gas price.  They did the same thing on the RCL board and the topic of stock shifted course.

 

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bluesea321

bluesea321

Posted
Posted
13 minutes ago, travelhound said:

Carnival raised over 6.25 Billion yesterday in debt and equity sales.  This liquidity should put Carnival in a good position to survive this crisis and probably take some market share when the cruise industry recovers.

 

The problem with that is that they paid a heavy premium for the debt, about 12%, so to survive they will have to generate much more cash flow than before.

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travelhound

travelhound

Posted
Posted
8 minutes ago, bluesea321 said:

 

The problem with that is that they paid a heavy premium for the debt, about 12%, so to survive they will have to generate much more cash flow than before.

Yup, but they can always refinance at a lower rate in the future when the cruise industry recovers.  Right now the financing gives them the much needed liquidity to survive.

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travelhound

travelhound

Posted
Posted
24 minutes ago, Ombud said:

Would anyone buy more? And if so, at what price?

If you believe that Carnival is going to survive, then I don't think you can go wrong at the current price of $8.  You will probably triple your money in 2-3 years as the cruise industry recovers.

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npcl

npcl

Posted
Posted
2 hours ago, bluesea321 said:

 

Yeap...  and with the market up 300 points no less.  Investors did not like the debt CCL incurred yesterday as npcl posted earlier.

I suspect that the fact that the new stock offering from CCL for 62.5 million shares at $8 is what really drove the price down.

 

The convertible bonds convert to 100 shares per $1000 of bond value ($10 per share) so that should put downward pressure on the stock anytime it goes above $11 depending upon if there are any restriction dates to the conversion. Though sometimes do an arbitrage play where they go long the bonds, but sell the stock  short.

 

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npcl

npcl

Posted
Posted (edited)
1 hour ago, travelhound said:

Yup, but they can always refinance at a lower rate in the future when the cruise industry recovers.  Right now the financing gives them the much needed liquidity to survive.

The question is when will the industry recover?  Their debt costs just went up $480 million per year.

 

One article expects that the CCL cruise revenue next year 2021 will be 25% of what it was in 2019.  Not rising above that level until 2023.

 

https://investorplace.com/2020/04/ccl-stock-will-survive-and-thrive-without-any-bailout/

 

Their analysis values CCL at $19 per share, but they caution that buying before uncertainties peak is dangerous. 

 

I do not expect the cruise lines to bounce back quickly. Very much a speculative play.

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travelhound

travelhound

Posted
Posted
1 minute ago, npcl said:

The question is when will the industry recover?  Their debt costs just went up $480 million per year.

 

One article expects that the CCL cruise revenue next year 2021 will be 25% of what it was in 2019.  Not rising above that level until 2023.

It will be a slow process, but if you are a long term investor, the odds look favorable.  This is not without risk, but at $8 a share, it's like buying a lottery ticket.  You will either make a lot of money or they will go bust.  Don't invest more than you can afford to lose.

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Jaxweb

Jaxweb

Posted
Posted

$8 is cheap, but now this thread is reminding me of threads in early to mid March were people were saying it was a good idea to cruise then instead of canceling so you can get discounts and extra OBC. 

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RedIguana

RedIguana

Posted
Posted

Dumped some play money into an online brokerage about 3 weeks ago just waiting to see if CCL dropped low enough to be worth buying it for OBC/dividends. Obviously dividends are going away for a while. Picked up 100 shares at 8.01, and another 100 at 7.92. Gives me some to sell off later, and if they go bankrupt it won't hurt too bad.

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