Curious What is Your Opinion in buying Carnival Stock to get the OBCs

[SJSULIBRARIAN]

We bought the 100 shares back when it was 31.49 per share and paying a dividend.  The OBC and dividends received since has more than paid back the original price. We were not in it to make money on the stock itself obviously since we still have it. 

 

Financial advisor of course thinks we should have sold long ago and still does but it is worth it for the OBC on several cruises a year before Covid and now only 2 a year post Covid. Sail on Princess too so OBC there as well. 

 

If I hadn't bought it then, I certainly would buy now at its low price if you plan to cruise a lot on Carnival brands.

[Arizona Sunshine]

Carnival Corporation has lost 85% of its value over the past five years. Does that sound like a good investment or a bad investment?

 

In the same period (Sept 2017-Sept 2022) Amazon is up 138%, Costco is up 192%, and Microsoft is up 216%. And, by the way, those were already giant companies in 2017, so you didn't need a crystal ball to pick them.

 

Let's review:

 

Carnival Corportion:  $6457 (100 shares) invested on Sept 29, 2017 worth $956 today.

 

Amazon : $6457 invested on Sept 29, 2017, worth $15 568 today.

 

Costco: $6457 invested on Sept 29, 2017, worth $18 737 today.

 

Microsoft: $6457 invested on Sept 29, 2017, worth $20 663 today.

 

So the CCL investor is down $19 707 compared to the Microsoft investor. Something-something OBC?

 

 

Every investor has a limited amount of funds to invest, whether it be $100 or $100 million. Why would you invest it in anything but the best opportunity for capital appreciation?

 

As I've said on these boards for years, invest your money in quality companies and buy your own drinks.

 

AS

 

 

[Florida_gal_50]

4 hours ago, Arizona Sunshine said:

Carnival Corporation has lost 85% of its value over the past five years. Does that sound like a good investment or a bad investment?

 

In the same period (Sept 2017-Sept 2022) Amazon is up 138%, Costco is up 192%, and Microsoft is up 216%. And, by the way, those were already giant companies in 2017, so you didn't need a crystal ball to pick them.

 

Let's review:

 

Carnival Corportion:  $6457 (100 shares) invested on Sept 29, 2017 worth $956 today.

 

Amazon : $6457 invested on Sept 29, 2017, worth $15 568 today.

 

Costco: $6457 invested on Sept 29, 2017, worth $18 737 today.

 

Microsoft: $6457 invested on Sept 29, 2017, worth $20 663 today.

 

So the CCL investor is down $19 707 compared to the Microsoft investor. Something-something OBC?

 

 

Every investor has a limited amount of funds to invest, whether it be $100 or $100 million. Why would you invest it in anything but the best opportunity for capital appreciation?

 

As I've said on these boards for years, invest your money in quality companies and buy your own drinks.

 

AS

 

 

I don't think anyone is purchasing it for an investment at this time.  It's a horrible investment.  It does get you OBC.  I've never gotten a free drink out of it.

[Gail & Marty sailing away]

We have collected over 90 time's and just own 100 shares. I think. 

[Hlitner]

The answer depends on math :).  If you cruise a lot on CCL lines than it may be a very good investment, especially at the current price.  That assumes that CCL will continue to stay in business and continue their shareholder credit program (which is extended year to year).  At the current price you would recover your entire investment with 4 longer (14 days+) cruises!  A single 14 day cruise would get you a 25% return on investment.  We have already received a huge return (probably over 1000%) on our original investment (about $2000 for the stock) so consider it money well spent.  It is the investment that keeps on paying, whenever we cruise on Princess, HAL, Seabourn, etc.  

 

Hank

[rkacruiser]

9 hours ago, Arizona Sunshine said:

As I've said on these boards for years, invest your money in quality companies

 

A gentleman with whom I was speaking about investments said to me:  "You sound like Warren Buffet."  That was a very appreciated compliment.  

 

5 hours ago, Florida_gal_50 said:

I don't think anyone is purchasing it for an investment at this time.  It's a horrible investment

 

Some day traders have done--and are doing well--with CCL as well as other cruise line stocks.

 

3 hours ago, Hlitner said:

It is the investment that keeps on paying, whenever we cruise on Princess, HAL, Seabourn, etc.  

 

Indeed!  The OBC that I have received over the years has helped to pay my onboard account many times.  

[HappyInVan]

I would never buy a stock for its OBC. I keep my investment $$$ decisions separate from my leisure $ choices.

 

Should we buy CCL for the OBC at $3? Perhaps, if your time horizon is just 6 months and you are confident that you will be cruising soon.

 

Why should we NOT invest in cruise companies? The market speaks. CCL is stalled near a thirty-year low. Despite the loosening of restrictions. IMO, the biggest worry is the inability of the ships to keep covid under control.

 

IMHO, another operational pause this winter (and/or a real recession) could finish off CCL.

[BermudaBound2014]

The biggest worry to cruise ships is paying their debt. In order to do that they need profit. Right now they aren’t even making enough money to make the interest payments alone without further dilution.

 

We just can’t get people onboard consistently and inventory just keeps growing. The pandemic has forever changed how a portion of the Public vacations. Add to that the very real recession and rising interest rates and the lines just keep taking punch after punch.
 

Loosening the protocols appears to have raised occupancy by over 25% so that’s definitely helping. 
 

It doesn’t seem to me that the lines are concerned about another outbreak. Even the CDc has moved from prevention to mitigation and have stated that there is no difference in how to treat vaccinated and unvaccinated in the workplace.  The latest I’ve seen suggests  95% of the population has immunity from either the vaccine or the virus itself. Unless there is a comorbidity in play this is behind us for all intents and purposes. I know that sounds cruel for all those who are still at risk, but I believe that the reality is that the world has moved on. 
 

If there is another outbreak onboard I doubt cruise lines will treat it any differently than Noro protocols. The worse thing that would likely happen to the lines in the event if another outbreak is bad press. If that happens, cruising is done. 

CCL will release Q3 before the opening bell tomorrow morning. I expect they will post the best quarter since the shut down. Unfortunately; I also expect they will end the quarter more in debt. If forward looking statements aren’t off the chart (and these are very difficult to verify) all three lines will suffer. 

 

 

[rkacruiser]

3 hours ago, BermudaBound2014 said:

inventory just keeps growing.

 

IMO, somehow--and I have no idea how this may be possible, it has to stop--the long range planning of the cruise lines on building more and more ships are coming back to bite them.  Cruise ships built for markets that never developed and are not likely to develop in the near future (Asia/China):  lots of "forward thinking" at the time the decisions were made to build.  Now.....?

[Bwana Tom]

20 minutes ago, rkacruiser said:

 

IMO, somehow--and I have no idea how this may be possible, it has to stop--the long range planning of the cruise lines on building more and more ships are coming back to bite them.  Cruise ships built for markets that never developed and are not likely to develop in the near future (Asia/China):  lots of "forward thinking" at the time the decisions were made to build.  Now.....?

I believe most of the new ship planning began years ago before all the problems associated with the pandemic. Unfortunately those contracts agreed to years ago are hard and expensive to break today. I'm fairly certain the planning taking place today is considerably different. 

[rkacruiser]

3 minutes ago, Bwana Tom said:

I believe most of the new ship planning began years ago before all the problems associated with the pandemic. Unfortunately those contracts agreed to years ago are hard and expensive to break today. I'm fairly certain the planning taking place today is considerably different. 

 

Certainly agree, but, for all three of the major cruise lines, those contracts pose as "anchors" for them to get "out to sea" again.  

[HappyInVan]

2 hours ago, Bwana Tom said:

I believe most of the new ship planning began years ago before all the problems associated with the pandemic. Unfortunately those contracts agreed to years ago are hard and expensive to break today. I'm fairly certain the planning taking place today is considerably different. 

 

Nonetheless, the cruise industry is stuck with the decisions they've made before the pandemic. Their market strategy had been to increase market penetration. Raising revenues by increasing the number of pax. Selling cruises with ever lower prices based on bigger ships with lower costs.

 

This strategy worked against them during the pandemic. As pax paying $100/night could cost $500/night in hotel costs.

 

https://ca.news.yahoo.com/windsor-man-had-pay-5-080000582.html

 

Going forward, this basic economics will remain a problem for mass carriers, as long as infected pax are required to isolate onshore. Why does Public Health still require quarantine?

 

As is well known, covid infects like an aerosol. Passing on infections just by proximity. That's why so many ships has had infection rates of >10% this summer. In contrast, I don't know of any ship with a norovirus infection rate of 10%.

 

Will the cruise industry ever generate the same level of vacationers of the pre-pandemic era? IMHO, not likely while a mask mandate can be imposed.

 

It is what it is.

[BermudaBound2014]

If the OP bought 100 shares when he posted this on Tuesday he would have spend $950.00

 

AT the opening bell the stock is trading at $8.00 so a loss of $150 in four days.

 

Of course, among other things, another loss on 3Q22 report this morning is driving prices down again, but I don't see an upside anytime in the near future. IMO, restructuring remains on the table. 

 

https://finance.yahoo.com/news/carnival-corporation-plc-provides-third-131500116.html?fr=yhssrp_catchall

 

 

[The-Inside-Cabin]

I bought another 100 shares.    I wouldn't recommend a monster investment but 100 shares is pretty cheap.   The OBC makes the effective dividend ( tax free by the way ) huge.
 

 

[BermudaBound2014]

2 minutes ago, The-Inside-Cabin said:

I bought another 100 shares.    I wouldn't recommend a monster investment but 100 shares is pretty cheap.   The OBC makes the effective dividend ( tax free by the way ) huge.
 

 

 

I agree. Trading at $7.21 as I type. 100 shares is a very small investment if you can redeem OBC immediately and then consider getting back out. 

[cwd79]

Would someone be kind enough to explain the OBC part when purchasing stock? If I purchase 100 shares today and have several cruises scheduled for Nov 2022, Jan 23, June 23, August 23 etc. How does that work? Thanks

[The-Inside-Cabin]

1 minute ago, cwd79 said:

Would someone be kind enough to explain the OBC part when purchasing stock? If I purchase 100 shares today and have several cruises scheduled for Nov 2022, Jan 23, June 23, August 23 etc. How does that work? Thanks

You email a redacted copy of your broker statement.   Here are the details. 

 

https://www.carnivalcorp.com/static-files/50351a91-4dc0-4f6b-bfec-684647e6129f

[HAL4NOW]

3 minutes ago, cwd79 said:

Would someone be kind enough to explain the OBC part when purchasing stock? If I purchase 100 shares today and have several cruises scheduled for Nov 2022, Jan 23, June 23, August 23 etc. How does that work? Thanks

2021 US Annual Report (carnivalcorp.com)

This is the most up to date document I could find. You can apply for OBC for the first three cruises mentioned, but it is too soon to apply for the August 2023 cruise.

[BermudaBound2014]

6 minutes ago, cwd79 said:

Would someone be kind enough to explain the OBC part when purchasing stock? If I purchase 100 shares today and have several cruises scheduled for Nov 2022, Jan 23, June 23, August 23 etc. How does that work? Thanks

 

Here you go:

 

 

 

You maybe too late for your November 2022 depending on when that date is. You can apply for Jan and June now. With this many cruises planned (assuming they avoid Ch 11) it's an excellent return on investment and as Insidecabin stated, tax free! 

Edited September 30, 2022 by BermudaBound2014

[The-Inside-Cabin]

Just now, BermudaBound2014 said:

 

Here you go:

 

 

 

You maybe too late for your November 2022 depending on when that date is. You can apply for the others. With this many cruises planned (assuming they avoid Ch 11) it's an excellent return on investment and as Insidecabin stated, tax free! 

I have applied for OBC 2 days before a cruise and they gave me the credit.   Use email.  

[BermudaBound2014]

2 minutes ago, The-Inside-Cabin said:

I have applied for OBC 2 days before a cruise and they gave me the credit.   Use email.  

 

That is EXCELLENT to know in this volatile market. The policy says applications must be made 3 weeks in advance, but I've read where it's taken longer due to covid. OBC in 2 days is great!  Thank you.

Edited September 30, 2022 by BermudaBound2014

[HAL4NOW]

1 minute ago, The-Inside-Cabin said:

I have applied for OBC 2 days before a cruise and they gave me the credit.   Use email.  

"Applications to receive these benefits should be made at least three weeks prior to cruise departure date." Quote from the document. If they apply the OBC with shorter notice, that is great. The November 2022 cruise is more than three weeks out.

[The-Inside-Cabin]

4 minutes ago, HAL4NOW said:

"Applications to receive these benefits should be made at least three weeks prior to cruise departure date." Quote from the document. If they apply the OBC with shorter notice, that is great. The November 2022 cruise is more than three weeks out.

I usually don't wait.   But twice I forgot and sent in my data while I was on a layover at the airport heading to the cruise.   They responded in less than 24 hours.    No guarantee this will always happen and waiting to the last second is not recommended.    But if you do ever forget.   Send it in anyway.  
 

you will have to have your TA verify that it was successful.   You can't check on your own.  

Edited September 30, 2022 by The-Inside-Cabin

[HappyInVan]

OMG! CCL traded as low as $7.01 this morning. Down 20% and right at the Morgan Stanley target of $7.

 

“Shares of Carnival fell below their pandemic lows Friday after the cruising company posted third-quarter earnings that revealed higher costs associated with inflation, supply chain disruptions and the maintenance of health and safety protocols...company is projecting fourth-quarter bookings below 2019 levels — at lower prices...”

 

https://www.cnbc.com/2022/09/30/carnival-shares-fall-on-ballooning-costs-dragging-cruise-stocks-lower.html

 

The CEO is upbeat, but let's analyze the bits and pieces.

 

Earnings before interest, taxes and depreciation was just $300 million for a strong quarter. Unfortunately, CCL is rolling over its debt at >10% rates.

 

CCL said that capacity was 90% occupancy in August. Unfortunately, “For the cruise segments, revenue per passenger cruise day ("PCD") for the third quarter of 2022 decreased compared to a strong 2019.”

 

CCL said that they still had $7.4b in liquidity. But, customer deposits total $4.8b. The bottom line is that CCL is on the threshold of insolvency. Any showdown or pause would have immediate consequences.

 

As we approach the winter season, what are the chances that the small Caribbean ports will reimpose vax, testing, mask and insurance requirements? Will you still cruise if the ships do that?

 

[cruisetravlr]

We also applied for ours late (3 days prior to sailing). I marked first thing in the subject line “Please expedite.”  We were notified during the cruise that we received the OBC. It was a hand-delivered note by guest relations. There should be plenty of time to submit for a November sailing.