IB Net Payout Yields Model

Carnival: Not The Best Travel Bet


  • Carnival continues to rally when the market expects travel demand to rebound.
  • The company is still operating far below full capacity and burning cash on a monthly basis.
  • The stock doesn't offer the same value as certain airline stocks while holding more recovery risks.
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The cruise line stocks ended up 10% on December 6 due to reduced Omicron fears, but the sector should've been rocked by news of more covid cases on an actual cruise. Carnival Corporation (CCL) remains too risky compared to the airline industry for investors wanting a travel related investment. My investment thesis remains more Neutral on the stock due to the extra risks.

Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Update - Dec. 28

More reasons to prefer the airlines over the cruise lines. 

  • The CDC is either investigating or observing 86 cruise ships after outbreaks of COVID-19 were reported on board.
  • The cruise lines impacted include Carnival Corp. (CCL -0.1%), Norwegian Cruise Line (NCLH -1.0%), Royal Caribbean Cruises (RCL -0.3%), and Disney Cruise Line (DIS +1.6%).
  • Most of the ships have yellow status, meaning they have met the threshold for a CDC investigation. None are at the highest color, red, which would warrant additional public health measures.
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