So at the start of this week (Wednesday to be specific) I decided to pile into Carnival Plc. I'd been looking at the price drop on the London market over the weekend (a 19% drop), and trying to work out why the same hadnt happened on the NYSE - until i realised there hadn't been any trading on Monday in the States.
I read some advice from Credit Suisse that said if the price dropped to below $30 in the US, they'd consider it to be a buy - on the basis that it has averaged 16.2x forward price to earnings, but at less than $30 it would be trading at 11.1x - so leaving the possibility of a significant correction.
Anyway, that's the view of the analysts. I'm more interested in the fundamentals of the business, which on Friday afternoon had a market capitalisation of £16 billion - but had previously been worth £20 billion, as I pointed out in a previous post.
Looking at this website, which is good for seeing past dividend payouts, Carnival has been a bit up and down over the years. Even if it all goes tits, I think Carnival will be able to deliver decent yields in the long term - Laura said cruises are a popular cheap holiday, and the figures I have read on the internet show a market that grows and grows over the decades. Given that Carnival owns about 50% of the market, it should be pretty well positioned. Its also exposed to North America, Europe, the UK and sends boats out to the Far East. I can see the Asian market really getting into cruises, and i'd expect Carnival will have a big chunk of that.
Anyway, as with everything I'll keep you updated quarterly. Carnival's up 3.86% since I bought it though :) :) :)
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