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Carnival CCL and Norwegian NCLH are stupid cheap right now. Yes, Covid is scary but let me explain just how discounted these stocks are. Breaking it down so simple that even your bastard ape brain toddler can understand it.
CCL’s total liabilities are $38.75B. Their total assets are $53.51B. If you subtract their total assets from their total liabilities you get $14.76B. That means if CCL closed up shop and sold all their ships and other assets, they would still make $14.76B dollars! Their current Market Cap is only $20.49B! If you believe that the cruise industry will completely fail, go bankrupt and sell all their assets, then it is valued correctly. If you believe the cruise industry is coming back, then this is stupid cheap! All signs are not only pointing to cruising coming back, they are expecting it to grow next year. 2022 bookings are already higher then 2019 bookings!
For those thinking, “well cruise lines took on a lot of debt”, let’s break that down. CCL’s net debt is $24.08 billion (total debt $31.23B minus cash $7.15B). Their total assets are $53.51 billion. That gives them a debt ratio of .58 (which is very good). Average debt ratio for the airline industry is more then double at 1.1562. So debt, really isn’t an issue.
For those worried about Omicron, all preliminary reports have actually been positive in the sense that it’s not as severe as Delta. Chances of hospitalization or death are, so far, very low. On top of that, boosters provide protection. Even better, Pfizer just announced they have developed the first highly effective treatment to Covid. The pills they developed are 90% effective! That’s a game changer that can actually put an end to the pandemic! It will almost completely reduce the severity of Covid. Hospitals will finally be back to normal and Covid will now be no worse then a common cold with these treatments.
Last bit of advice to remember is that the most money to be made is when things go from terrible to ok. Not ok to good.
If NCLH and CCL stock prices go back to just what they were earlier this year, that’s over a 60% gain! If the stock price went back to 2 years ago, precovid, then you would triple your returns (although that’s not likely soon but maybe in the long term). If they just get back to what they were near the height of delta 6 months ago, that’s over 60% gains!