Is CCL STOCK a Buy @ ? Let’s Talk Carnival Cruise Stock

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Oh my goodness if i had a dollar for every comment i’ve been getting lately on doing a video on carnival cruise line i would probably have enough money to like buy my own cruise ship i don’t know like it’s been ridiculous so many comments from so many people about cclc ciel it’s like every minute do a video about ccl we want to hear your opinion about ccl and finally

One second ago i said you know what i’m gonna do a video about ccl carnival cruise line let’s talk about the stock once and for all which it’s a painful shock for me to talk about this is by far and away my worst investment of my life like like it’s not even close and so it’s not exactly a fun subject for me to talk about but you know what if the people want it

We’re gonna talk about it okay so smash the thumbs up button if you’ve been waiting for me to do this video is i’m finally doing it for you guys and it’s a painful painful one to do okay so let’s first start out by looking at carnival stock price it fell about $27 a share today up about 16% app oh sorry that’s wrong stock carnival cruise line here they fell about

Another nine and a half percent okay nine and a half percent it’s under $8 a share under $8 a share $7 in 97 cents pretty much the only situation that could have ever got this stock price to this price is the roni situation literally this is the only thing like like if they had a ship that like ended like the titanic and it went underwater like even that wouldn’t

Have brought the stock to seven dollars and 97 cents the only thing that could have docked this stock to this price is the roni situation and that’s just that’s just facts okay so let’s go ahead and look at the stock chart of carnival cruise line for the last three months and you’re gonna see it was a forty fifty dollar stock it was smooth sailing no pun intended

And then some worry started about the rowing we first found out about the roni at some point in january right and at first was like ah like it wasn’t even worth paying attention to then february rolls around and then also in a little more talked about it and then we hear about some cruise ships that might have the roni situation going on and and then this starts

To be a little bit of actual fear out there and people start thinking whoa or what could be what could this because this would be something that’s really bad by the time march hits people start thinking oh yeah this is gonna be bad and next thing you know there’s no more cruises no mas cruises ok no more cruises it just it’s shut down ok there was pretty much the

First industry to kind of shut down even before the restaurants and a lot of the hotels and things shut down the cruises they just they stopped going on cruises they weren’t allowed to go and cruise anymore no more cruises and that is what took this stock price down in a massive way i mean a massive way and just look at that i mean that is pure and utter destruction

Like i said there’s nothing that could have happened to this this company that could have brought this stock down that fast even if there was like some insider trading or some fraud even if there was like something a fraud which is a big term even if there was fraud somehow i don’t even think the stock would have fell to seven dollars in 97 cents literally that’s

How bad like the worst thing happened the worst thing literally we had if we had a normal recession stocks not trained at 797 and i can guarantee you that okay norwegian cruise line they’ve also been hit there one of the other biggest players out there stock went from 50 plus you know fifty four dollars a share it’s eight bucks here today royal caribbean that was

Another huge there is this still a huge player in the cruise industry they’re pretty much the number two beef behind carnival cruise line and those three companies have like kind of i don’t say i monopoly on the industry but they have a dominant market share of the entire cruise industry and that stock went from a hundred and thirty four bucks back in january to

You know here we are its twenty four dollars here today so every single one of these stocks has been absolutely devastated in in a in the worst way possible now going into this carnival cruise line had over half a billion dollars sitting around their balance sheet which a half a billion dollars is fine in almost any type of normal situation we were actually the

Best capitalized cruise company of the three big dogs i looked into norwegian cruise line when i was thinking about like a cruise line stock these are big dividend payers and i’ve been taking you guys know i’ve been taking the dividend investing super serious in the back half of 2019 especially this year and so i start looking into these sorts of cruise companies

Right before the roni unfortunately sometimes you’re gonna have some really luck in this game when that’s unfortunate and we did in this situation but when i looked in these companies i looked at norwegian cruise line i looked at royal caribbean and i looked at carnival in of those three companies carnival had the best capital position they had the most cash on

Their balance sheet and so in any type of normal situation 1/2 billion plus dollars sitting around in cash is plenty it’s plenty but unless a situation happens where your business goes to zero overnight it’s super unrealistic scenario that never ever happens regardless i’m pretty much anything that happens out there unless your business or your entire worldwide

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International business unless it goes to zero dollars overnight a half a billion dollars is way more than you could ever need as a cruise company but guess what happened their business went to zero okay their business went to zero i mean let’s imagine let’s imagine a horrible year for a carnival cruise i’m in 2020 i’m just a disaster where they’re like what happened

To you guys okay a horrible year for carnival cruise line would be like them putting up like 14 billion dollars in revenue and doing like one and a half billion dollars of net income there would be a disaster okay i mean an absolute disaster in a normal scenario because people are like what happened you guys you your net income fell 50 percent look at your revenue

Fell seven billion dollars you over here what is the matter for you guys right but the only scenario that could be worse and that is zero dollars which is what their business is right now they have zero dollars in revenue they are making no money from cruises right now it’s a once in a hundred year event happened okay a once at literally a once in a hundred year

Event happen where their business had to be completely shut down and it is still shutdown it probably won’t be shutdown for let’s say the next one to two months in their revenues are zero literally zeroed out right now a once in a hundred year vet who could have predicted it no one okay that is unbelievable absolutely unbelievable you know i don’t know what else

To say now okay so then we go through all that situation and the devastation has happened and some people were wondering will they get a bailout no i always said yeah i doubt it okay i doubt they get a bailout but it’s a possibility why did i kind of have some some thoughts that they probably won’t get a bailout from the government well because i know how these

Companies are incorporated and they’re not really us companies they’re not carnival cruise i’m isn’t really a us company you know obviously that a lot of their executive team or americans or other high-ranking employees might be americans a lot of their shareholders are americans but the day carnival cruise line isn’t technically an american corporation so sure

Enough the bailout comes and they’re not part of it and not just carnival but i’m talking about all the cruise blue cruise companies none of them are part of that huge bailout and you know so it didn’t really come as a surprise to me because i always thought if you know in this situation over the last couple months now carnival could get through it based upon

Raising some money and since they weren’t gonna get the bailout money well they’re gonna have to probably raise some money i mean the airlines they’re obviously getting bailout money because all these are us companies and almost all their employees are u.s. employees so they’re gonna get a bailout even private jet companies even us-based private jet companies are

Likely gonna get billions upon billions of dollars of federal aid which is kind of hilarious right who would think a private jet company we’ve heard federal aid but you know what they’re even getting federal aid cruise companies no such luck so and with with a situation like this where you have a half billion dollars on the balance sheet and you have zero in revenue

You’re gonna have to raise some money there’s just no other way around you’re gonna have to raise some money a normal recession scenario where business slowly starts to decline and decline and they have less and less customers yeah that’s for almost an easy-to-navigate but it’s way easy compared to this situation where you go from oh you have all this revenue and

All these profits to zero overnight and that’s literally what happened yeah extremely profitable business model unbelievable revenues to nothing over night that’s incredible it’s like nothing we’ve ever seen in the stock market and certainly not in modern history and probably ever it’s absolutely extraordinary so with a half billion gonna have to raise money so

It’s just actually literally yesterday they decided they’re gonna go ahead and raise some money so they raised essentially six point two five billion dollars of new debt and equity yesterday on wins and here’s what it looked like so carnival priced four billion dollars in bonds that are going to mature in 2023 which was up size from the three billion that was

Originally planned so i would say in a situation like this raise too much money versus not enough money because what happens if cruises aren’t allowed to operate in a month from now or two months from now or something like that right so no matter what they like just raise an extra billion it in case you need it okay raise an extra billion just in case you need it

No they yield they have to pay on that it’s ridiculously high eleven and a half percent that is unbelievably high okay unbelievably high but hey when you’re desperate you got to do some desperate things and carnival has to do a desperate thing and you know they want the money they got the money they got four billion but yeah eleven and a half percent you have to

Pay on that that’s rough okay keep in mind that this is great by comparison carnival paid one percent yield in october literally what is that six months ago six seven months ago they’re paying a one percent yield we could do eleven and a half percent but that’s that’s the that’s the effects of the roni right there if you ever want to know the effects of the roni

That’s effects if you go from 1 percent to eleven and a half percent ridiculous okay now the company also did another 1.75 billion dollars in convertible notes which have a five point seven five percent coupon as well which is pretty danny and you know pretty dang expensive and lastly which i didn’t like this move i thought it was a bad move my personal opinion i

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Think this is a bad move it’s not like they got a lot of money from this but they went ahead and issued new stock to raise another 500 million dollars so they raise another 500 million dollars it to issue new stock and i think that was a bad decision they did bring it down from they were gonna raise like 1.25 billion i’m glad they only raised you know 500 million

And they issued that at 8 bucks a share for a stock that was fifty three months ago a stock that was fifty three months ago they have to issue new shares at eight dollars i didn’t really like the move but hey you know five hundred million is five hundred million i guess we can keep that 500 million dollars around but essentially if you’re wondering such a bad

Mood you never want to really like likely put new shares out there when you already have a lack of demand for your stock and obviously with carnival there’s a lack of demand for the stock as it is right it was bouncing back a bit last week and now you put a bunch more shares out there it’s gonna create even a bigger lack of demand for your stock more shares out

There you want to do something like tesla did er must the best money raiser in the history of mankind right elon musk well with obviously my tesla company right he raises money when the stocks like 700 plus dollars that’s the best time to raise money he got another 200 billion dollars plus will was like 700 plus and keep in mind tussle stock is is definitely not

$700 today that was a great decision you want to raise capital if you’re talking about issuing new shares when your stock price is really high not when it’s really low because when you’re when it’s really low it’s just a bad bad situation for everybody versus when holding the stocks really expensive you have to dilute very few shareholders and you can get some

Big dollars let’s put it that way okay so if we go ahead and look at ccl stock it’s now up 18 percent that damn it i keep getting distracted that’s not ccl stock okay so how many shares of ccl stock do i have i have over 2,600 shares of carnival cruise line stock so quite a few shares needless to say across my accounts over 2,600 shares i think it’s pretty dang

Close to 2,700 shares and i know a lot of people want to know will i buy more will i buy more what is kind of my my overall opinion on carnival cruise line somebody that still owns you know let’s say 2,600 2,700 shares right now and i will say maybe i’ll buy more but ideally under $7 okay if i can get under 7 maybe it’s still not a hundred percent it’s like uh

Maybe okay and usually you guys know me if i get to buy a stock that i was buying in the past for a much cheaper price um like all in i’m like give me those shares give me those shares it’s a little different with carnival cruise line because there’s the risk of bankruptcy and we’ll talk about that in just a moment there is that risk but it is a maybe i’ll buy some

More shares okay here’s why the valuation i gotta say is is a little bit compelling now we’re talking about a company that has a market capitalization of five point six billion and you know if their stock continues to fall next thing you know it’s under seven bucks it’s gonna have under five billion dollar market cap which is it gets to a point where it does get

A little attractive from a risk/reward standpoint okay it does get a little attractive even for somebody like myself that already put a lot of money in the stock and doesn’t really want to buy anymore it does get a little attractive here’s kind of my stance on things i would say there’s a twenty to thirty percent chance that carnival cruise line ccl goes bankrupt

Okay which is by far and away the highest number of any my company’s i wouldn’t even put another one of my companies at a ten percent chance of going bankrupt carnival cruise i’m going to put a 20 to 30 percent chance that’s really hot now you can say well why why haven’t you sold off your current carnival shares i would have to be like a 50/50 if the if it was

If it was ever at a point where i was like a 50/50 and i felt like there was like a 50% chance the company was gonna go bankrupt or a 60% chance i would sell my remaining shares i would have already sold my remaining shares but in this situation especially with the money they raised i would say there’s a 70 you know is 70% to 80% chance they don’t go bankrupt and

A 20 to 30% chance they do go bankrupt but there is that possibility out there which does make me say do i want to throw more money at this one if there’s that high of a probability of this company going bankrupt okay but here’s the other situation with this stock i want to talk about two things here that are very important some folks are thinking can this stock

Get back to a place where it’s 50 60 70 dollars within the next year or two i would say absolutely not i think that’s a bit of a pipe dream if you think this stock and in let’s say the next two or three years it’s now you can say in the next year or two let’s say in the next two or three years if you think the stocks gonna get to 50 60 70 dollars i think you’re

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Honestly dreaming okay now the way you should be looking at this stock is either they’re gonna make it out to the other side and they will become a successful company in a very profitable company again or they’re not gonna make it at all it’s one of two things okay it’s definitely one of two things and that’s a great point somebody ccl bull he brought up that in

The discord chat in the private group the other night he’s like this is this is one of two ways they’re thinking go bankrupt and it’s going to zero dollars or you know his opinion i think was like it’s going to 50 or $60 again i don’t personally think it’s going to those prices anytime soon however if they can get through this big if if they can get through this

To the other side then i believe there’s definitely a very real possibility this will be a 20 to 30 dollar stock within the next two to three years within the next two to three years not acting like five ten years now no within the next two to three years this can be a twenty to thirty dollar stock but they do have to get obviously get through this so then there’s

No way i can foresee in my opinion that this company makes it through this mess short term and stays out of five to let’s say $15 range two to three years from now it’s either they’re gonna make it through they’re gonna get back to big profitability again over the next you know few years and you know if things will be onward and upward and things will be looking

Great or they’re going bankrupt it’s it’s either it’s either or it’s it’s and there’s no middle ground with carnival cruise line stock in my personal opinion okay so here’s the thing with carnival cruise line if you want to buy this stock just understand the risk understand that there’s a 20 to 30 percent chance this company can go bankrupt and i think if you can

Deal with that and it’s money that you’re willing to risk out there and you’re like you know what i’m willing to take that risk i can understand that keep in mind this isn’t an amazon stock there’s there’s pretty much a zero percent chance amazon goes bankrupt i think i would literally put that out there 0% chance amazon stock goes bankrupt but you know what also

There’s a 0% chance there’s a 0% chance the amazon stock is going to 3x or 4x in the next two or three years carnival cruise i’m has a legit opportunity to three extra forex their stock but they also have a legit shot at going bankrupt okay so i think with this type of stock you just got to understand the risk you’ve got to fully contemplated this before you put

Money in it and you’ve got it almost kind of this is a different this is a different situation than buying apple stock and it goes down some and you buy some more and it’s like cole apple is a great company i don’t understand the business model all the block this is a different situation this is more like you put money in and you just forget about it you forget

About it and you’re like whatever happens happens stocks going as zero and i just lost all my money i put it i put my 10,000 bucks i’m willing to risk in it i’m $1,000 it’s either going in that or it’s gonna be you know two thousand three thousand four thousand dollars in a few years from now it’s one of those two scenarios there’s no in-between for a carnival

Cruise line okay so i just think you got a look at it very different if you’re somebody out there that’s willing to take that risk i’m willing to continue to hold my shares oh you know if it goes to zero and they can’t make it through this you know yeah that sucks but with over six billion dollars i think they should be able to get through this short-term mess i

Think they should be able to make it out to the other side and i think eventually people are going to want to take vacations again or gonna want to take cruises i don’t think everybody wants to be stuck in their house i don’t think this is such an enjoyable thing for most folks out there maybe someone like myself that doesn’t really care to go on vacation but most

Folks i bet you they can’t wait to get out of the house ain’t going vacation and don’t matter where you go on vacation you’re around a lot of people you come to my city las vegas you’re around a lot of people so eventually people are just gonna have to deal with the fact that they’re gonna be around other people and there’s a possibility getting sick and i i don’t

See i think like most twenty to fifty year olds don’t even care about the roni i’ll be completely honest like i think most of them well if you if they were allowed to go to restaurants and actually do things right now i think they would the government had to step in and say no you can’t go to that business no you can do this no you can’t do that but i think a lot

Of folks are you know when things kind of clear up i think a lot of folks are gonna be dying to go on vacation and do things like that because you know it’s only one life and you can only you can stay in your house only so long so that’s my opinion on it understand the risks with this talk i might buy some more we’ll see okay thank you for watching and have a great day

Transcribed from video
Is CCL STOCK a Buy @ $8? Let's Talk Carnival Cruise Stock By Financial Education

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