How Successful Investors Get RICH

Learn everything you need to know in 'The Canadian Guide on How to Invest in Stocks Successfully' for FREE from The Successful Investor.

How to Invest In Stocks Guide: Find 10 factors that make your investments safer and stronger.

 I consent to receiving information from The Successful Investor via email. I understand I can unsubscribe from these updates at any time.

Topic: How To Invest

Stock market investments: Carnival strives to keep its cruise ships full

Stock market investments: Carnival Cruises image

Pat McKeough responds to many personal questions on specific stock market investments and other investing topics from the members of his Inner Circle. Every week, his comments and recommendations on a selection of the most intriguing questions of the past week go out to all Inner Circle members. And every Friday, we offer you one of the highlights from these Q&A sessions.

One question this week anticipated the winter holiday season. An Inner Circle member asked about the prospects of Carnival Corp., a leading cruise ship company.

Q: Hi Pat: Wondering what your thoughts are on Carnival Corp. Thanks.

A: Carnival Corp. (symbol CCL on New York, and its affiliate, Carnival plc, symbol CCL on the London Stock Exchange; www.carnivalcorp.com) operate as a single business but have separate exchange listings.

The combined company is the world’s largest cruise ship operator, with over 100 ships. It took its current form in 2003 through the merger of Carnival and rival P&O Princess.

Major brands include Carnival Cruise Lines, Princes Cruises, Holland America Line, Costa Cruises and Cunard Line. The company also operates ports and hotels.

Carnival gets 60% of its revenue from its North American operations (mainly in the Caribbean). It gets the remaining 40% from Europe, Australia and Asia.

As a member of my Inner Circle, you will get individual answers to your personal investment questions. And you will see my answers to questions other investors like you are asking. In fact, you will get virtually all the investment advice I have to give. You will have access to all of our advisories – The Successful Investor, Wall Street Stock Forecaster, Stock Pickers Digest and Canadian Wealth Advisor – and full access to the members-only, password-protected Inner Circle section of The Successful Investor Network website.

Although my team carefully researches all the stocks that members ask about, I personally review each and every recommendation. To ensure this close personal attention, only a limited number of members can be admitted to our Inner Circle. Under the pressure of world events, even more investors are asking for my personal investment advice. We are nearing our membership limit already. Click here to secure your membership in the Inner Circle right away.

Stock market investments: Carnival increases earnings despite jump in fuel costs

In its third quarter, which ended August 31, 2011, Carnival’s revenue rose 11.7%, to $5.1 billion from $4.5 billion a year earlier. Passenger tickets accounted for 77% of the company’s revenue. The remaining 23% came from onboard services, such as casinos and gift shops.

Earnings rose 2.6%, to $1.34 billion from $1.30 billion. Earnings per share rose 4.3%, to $1.69 from $1.62, on fewer shares outstanding. Carnival’s earnings increased even though its fuel costs jumped 46.7%, to $581 million from $396 million. Carnival does not use hedging contracts to cut its fuel-price risk.

The stock has dropped 24% in the past year. It now trades at 11.9 times the $2.86 a share that Carnival is forecast to earn in 2012. The $1.00 a share dividend yields 2.9%.

In his analysis of the stock in this week’s Inner Circle Q&A, Pat looks at the potential risks and rewards of Carnival’s decision to invest in new ships. He also considers whether, in an uncertain economy, Carnival can continue to attract customers with initiatives such as theme cruises centred on musical performers or sports teams. He concludes with his clear buy-hold-sell advice.

Inner Circle members see Pat’s analysis and recommendations on the stocks other members have asked about in each week’s Inner Circle Q&A. You can view it immediately when you become a member of this special investment group. You will get Pat McKeough’s answers to your personal investment questions, full access to our members-only Inner Circle website, and many other membership privileges. Click here to get started right away.

(Note: If you are a current member of the Inner Circle, please click here to view Pat’s recommendation. Be sure to log in first.)

Comments

Tell Us What YOU Think

You must be logged in to post a comment.

Please be respectful with your comments and help us keep this an area that everyone can enjoy. If you believe a comment is abusive or otherwise violates our Terms of Use, please click here to report it to the administrator.