Carnival Stock Is a Mess for the Rest of 2020

Carnival Stock Is a Mess for the Rest of 2020

The White House blocked the CDC’s attempt to keep cruise ships docked until mid-February. Carnival stock looks to have run aground for now. Piper Sandler raised its price target on Beyond Meat to $178, but MKM Partners’ JC O’Hara is willing to get even more bullish on the stock. Dow futures jumped Thursday, one day after the 30-stock average’s best session since mid-July. Orlando Sentinel readers called into the Ask an Expert hotline last week seeking free advice from certified financial planners about retirement, investing and other money matters. The edge cloud company seems to be benefiting from optimism after President Trump quickly reversed course on his decision to halt economic stimulus negotiations with Congress.

Like a bad dream, Carnival (NYSE:CCL) recently announced the cancellation of most of its U.S. cruises through the remainder of 2020. Despite intervention from the White House, it wasn’t enough to keep its share price from falling on the news.

carnival cruise (CCL) ship on the water

How did the White House intervene?

On Sept. 30, the Centers for Disease Control and Prevention (CDC) extended the “no sail” order on cruises from U.S. ports through Oct. 31. It had initially sought a ban through February, but the White House overruled the agency.

Florida’s two senators, Marco Rubio and Rick Scott, along with leaders at the state and municipal level, have been pushing hard for the cruise industry to resume sailings sooner rather than later.

While the cruise industry is a big economic engine in Florida, some perceive the White House’s move as an attempt to woo voters in the important swing state for the 2020 election.

“The last thing the cruise industry leadership wants is for this to become a political issue,” Wedbush analyst James Hardiman stated Oct. 1. “This is an industry that’s been around for a long time and they intend to be around for a long time going forward.”

Morningstar analyst Jaime Katz believes that the extension of the ban to Nov. 1 doesn’t mean much because Carnival and the other cruise lines weren’t planning to send out any U.S.-based cruise ships until November at the earliest anyway.

I’m not sure cruise industry optimists can break out the champagne just yet because there’s a lot of suffering to take place before things get back to normal.

On the cancellation front, Carnival will resume operations on a phased-in basis. As a result, it has canceled most of the departures from U.S. ports, including its cruises to Hawaii, through the rest of 2020.

On Oct. 5, Norwegian Cruise Line Holdings (NYSE:NCLH) announced that it had extended the cancellation of its cruise operations through at least the end of November. Some of its cruise ships might not hit the high seas until April.

“We continue to closely monitor the Covid-19 coronavirus situation and the global health environment. With Covid-19 continuing to impact communities and ports around the globe, we have extended our voluntary temporary suspension of all voyages through November and cruises on Norwegian Star, Norwegian Spirit, and Norwegian Dawn through March 2021,” the company stated in a press release.

The only one of the three major cruise operators that’s yet to cancel November cruises is Royal Caribbean (NYSE:RCL). However, its own cruising blog recently wondered if it would soon be next to shut down operations.

“The big question is if/when Royal Caribbean may announce a new set of cancellations to match what the other cruise lines have done,” wrote Matt Hochberg in an Oct. 5 blog post.

“Royal Caribbean rarely gives any kind of warning when a new set of cancellations are going to occur, and there is no consistent pattern to when they have been announced.”

However, Royal Caribbean chief executive officer, Richard Fain, did make some comments on the subject.

“Soon, we hope to have the opportunity to put our plans to the test. It’s not going to happen overnight. It is going to take time for this process to work through,” Fain stated.

“The process will be carefully evaluated by independent outside observers and then only on a ship or two at first, we hope to start sailing again.”

That sounds like a fait accompli to me. We’ll know very soon, I’m sure.

Needless to say, business is not coming back in 2020, which should put some downward pressure on its stock as we get closer to the end of the year, and investors opt to harvest their tax losses.

Year-to-date through Oct. 7, Carnival is down 69%, suggesting there could be a lot of this happening between now and New Year’s Eve.

In the long term, I am bullish about all three cruise stocks. In my last article about Carnival, I suggested that strong insider buying portends good times are in the cards later in 2021. But first, we have to get there.

Wedbush’s Hardiman commented on the future.

“I am fairly bullish on the industry long term. It’s obviously a mess in 2020 and 2021 I think is going to be a messy year as well,” the Wedbush analyst stated. “But the best news we could get is that they were given the clearance to resume operation.”

However, the direction of its share price through the end of 2020 is dependent on whether the novel coronavirus gets any worse in places like Florida, Texas, and Louisiana where most of its boats sail from.

In early September, I argued that $13 could be a good entry point for buying Carnival shares. I don’t believe things have gotten visibly better or worse since then, so I’ll continue to recommend its stock in the low double digits.

Unless I’m wrong, Carnival’s share price appears to have run aground, and you’ll get such a buying opportunity before the end of the year.

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.


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Will Ashworth, InvestorPlace Contributor

Beyond Meat stock could rally 32% to break to all-time highs, MKM Partners says

Beyond Meat stock could rally 32% to break to all-time highs, MKM Partners says

Trend-setting teens are backing Beyond Meat.

Piper Sandler analysts raised their price target on the plant-based meat company’s stock on Tuesday after its research suggested increasing adoption among that demographic. Piper Sandler’s $178 target is still lower than its current price, though – the stock has rallied 141% this year and closed Tuesday at $181.86.

JC O’Hara, chief market technician at MKM Partners, is willing to get even more bullish on the stock.

“This is one of the better-looking charts out there,” O’Hara told CNBC’s “Trading Nation” on Tuesday. “What I really like about this setup is the fact that price is currently breaking higher from a multimonth base pattern as we speak, and as it does it’s establishing a new uptrend.”

O’Hara said Beyond Meat faced a zone of overhead resistance around $165 to $170, an area it broke out above early this month. In technical analysis, old resistance levels typically become support and insulate the stock from too much downside in case of any weakness.

“The question becomes where can Beyond go? We have two clear upside price targets — that first level is $200, a nice round number … and the second overhead level that we’re looking at is $240,” said O’Hara. “So, overall, a great chart with plenty of upside left in our opinion.”

A move to $240 would mark an all-time high. Its record currently stands at $239.71, set July 2019.

In the same “Trading Nation” segment, Chantico Global CEO Gina Sanchez said Beyond Meat’s fundamentals have to catch up to the parabolic price action.

“Its revenue growth is meteoric but it is still digging itself out of a negative cash flow hole and negative margins. Now that’s not to say that they’re not going to get there. That meteoric growth is going to help them get there, but they’re trading very rich. I mean, you’re talking 300+ times forward PE, 6,000 times trailing PE,” said Sanchez.

Analysts expect Beyond to post a fiscal year profit of 7 cents a share, according to FactSet, up from a loss of 29 cents a share in 2019. Earnings for 2021 are forecast to leap even higher to 59 cents a share.

The company is expected to report third-quarter earnings on Nov. 2.



Author: Keris Lahiff

5 things to know before the stock market opens Thursday

5 things to know before the stock market opens Thursday

Pedestrians walk past electronic screens of the New York Stock Exchange (NYSE) in New York on Sept. 3, 2020.

Xinhua News Agency | Getty Images

Dow futures pointed to a 200-point gain at Wall Street’s open after President Donald Trump said in an interview Thursday morning that coronavirus stimulus talks have reopened. On Wednesday, the 30-stock average saw its best session since mid-July on optimism that some coronavirus aid may still be possible in the near-term. While Trump ended talks until after the election on a broad stimulus deal Tuesday afternoon, he renewed hope Tuesday night for a targeted approach to help sectors of the economy most in need, including airlines and small businesses. Trump also tweeted support to send another round of $1,200 checks directly to Americans. After Tuesday’s sharp declines, the Dow closed up 530 points or 1.9% on Wednesday. The S&P 500 rose 1.7% and the Nasdaq jumped 1.9%.

The Labor Department on Thursday morning reported a greater-than-expected 840,000 new filings for unemployment benefits for the week ending Oct. 3. That’s a sixth week under 1 million for initial jobless claims, in a continuation of a slow recovery in the jobs market. However, such totals are still well above anything the U.S. had ever seen before the pandemic.

Joe Biden and Donald Trump speak during the first U.S. presidential debate on Sept. 29, 2020.

Kevin Dietsch/UPI | Bloomberg | Getty Images

The next presidential debate, set for a week from Thursday in Miami, between Trump and Democrat Joe Biden will be virtual, the bipartisan Commission on Presidential Debates said Thursday morning. However, minutes later, Trump told Fox Business he won’t participate, adding he’s “not going to waste” his time with a virtual debate. “I don’t think I’m contagious,” Trump also said. Since Trump’s diagnosis was announced last week, more than a dozen White House officials have tested positive for Covid-19. Public health officials recommend that Covid-19 patients be isolated from others for at least 10 days after contracting the virus, and up to 20 days depending on the severity of the infection.

Democratic vice presidential nominee Senator Kamala Harris and U.S. Vice President Mike Pence participate in their 2020 vice presidential campaign debate held on the campus of the University of Utah in Salt Lake City, Utah, October 7, 2020.

Brian Snyder | Reuters

The first and only debate between Vice President Mike Pence, 61, and Sen. Kamala Harris, 55, was quieter and more disciplined than last week’s chaotic presidential debate. Despite the calmer tone Wednesday night — and the two sheets of Plexiglas separating the contenders in Utah — sparks still flew from both sides, with Harris on the attack over the Trump administration’s response to the coronavirus and Pence, head of the White House’s Covid-19 taskforce, defending it. Both candidates dodged questions about their running mates’ ages. Trump is 74. Biden is 77. In a debate without a single jaw-dropping moment, people on social media went crazy about a fly that landed on Pence’s head.

U.S. President Donald Trump makes an announcement about his treatment for coronavirus disease (COVID-19), in Washington, U.S., in this still image taken from video, October 7, 2020.

The White House | via Reuters

In a White House video released Wednesday evening, Trump called an experimental drug treatment a “cure” for his Covid-19. “I think this was a blessing from God, that I caught it,” he said, because it led him to take Regeneron’s antibody cocktail.

Regeneron said Wednesday evening it submitted an application for emergency use authorization. The president got it under compassionate use. Earlier in the day, Eli Lilly said it applied for emergency authorization for its antibody treatment. Shares of both Regeneron and Lilly were higher in Thursday’s premarket trading.

Trump said he wants to get these drug treatments out for the American people as quickly as possible. “I want everybody to be given the same treatment as your president, because I feel great,” he said. However, there’s no way for the president or his doctors to know whether the Regeneron cocktail had any effect. Trump also took other treatments at the same time.

Facebook co-founder, Chairman and CEO Mark Zuckerberg testifies before the House Energy and Commerce Committee in the Rayburn House Office Building on Capitol Hill April 11, 2018 in Washington, DC.

Yasin Ozturk | Anadolu Agency | Getty Images

Facebook announced it will stop running political ads in the U.S. after polls close for the election on Nov. 3, and keep them halted for an indefinite period. The temporary ban is expected to last about one week, but that will be subject to change, said Sarah Schiff, Facebook’s product lead for political advertising. The social media network had previously announced that it would not allow new political ads to run starting seven days prior to the election. The company has also previously announced that it will not allow any ads that seek to delegitimize the results of the election.

— The Associated Press contributed to this report.


Author: Matthew J. Belvedere

Free financial service helps Sentinel readers manage their money

Free financial service helps Sentinel readers manage their money

Free financial service helps Sentinel readers manage their money

Orlando Sentinel readers called into the Ask an Expert hotline seeking free advice from certified financial planners about retirement, investing and other money matters.

The event, held Oct. 4 this year, is sponsored annually by the Financial Planning Association of Central Florida and the Orlando Sentinel. Look for the Ask an Expert feature each Monday on the Sentinel’s Central Florida Business page.

Here is a sampling of questions and answers from the hotline.

Q: When COVID-19 hit, I quit my job working in the schools since I have pre-existing conditions. I only have $16,000 in savings and receive $1,200 a month in Social Security benefits. My expenses are between $3,300-$3,600 a month, including a mortgage payment of about $1,200. I also lease my car at $400 a month. What advice would you give me to help get closer to actually retiring? — N.W., Clermont

A: First, I would consider downsizing your home, so you have a lower monthly mortgage payment or pay even less by renting. Consider getting rid of the leased car and look for a lower-cost vehicle. Look for a job where you can work from home, so you don’t have to put yourself at risk and can earn some extra income. It will be tough, but go over every item in your budget and see what is essential, what can be cut, and where you can save. — Marisa Bradbury, Sigma Investment Counselors, (888) 718-1132

Q: I have two cemetery plots in another state purchased many years ago. I will not need them. Can I give these to the church and receive a charitable deduction? — J.M., Winter Garden

A: Yes, but the effort involved may be more than you’re expecting. If the plots are selling for more than $5,000 you will have to obtain a qualified appraisal of their value. The appraisal must be arranged for and paid by you, the donor. This can be an expensive cost, so you’ll have to determine that your tax savings from the donation are greater than the time and expense to proceed with the donation. — Mike Salmon, Moisand Fitzgerald Tamayo LLC., (407) 869-6228 ext. 112

Q: I will be 70 next September and will start taking my Social Security at that time. My wife, who will reach full retirement age for Social Security in March, has been receiving Social Security disability payments for years. Do we need to do anything to have her Social Security payment go up to her full payment in March so she can receive the higher spousal benefit? — L.R., Indian Shores

A: From what I have experienced, the Social Security payment has automatically increased without having to notify the Social Security Administration. If you do not receive any increase, make an appointment with the Social Security office to address any changes that need to be made to get a higher benefit. — Nancy Hecht, Certified Financial Group Inc. (407) 869-9800

Q: With the uncertainty of the election, should I sell my stocks? — N.N., Orlando

A: Don’t let your political views lead you to impulsive investment decisions. If you are concerned about a market crash, one way to protect your portfolio is to place trailing stop-loss orders on all or a portion of your shares of stock and exchange-traded funds. If they continue to go up in value your portfolio will benefit, however, if they fall in value, they can oftentimes be sold at your predetermined “stop” price depending on how quickly the price falls. — Jay Stokes, Stokes Wealth, (407) 843-4200

Q: My account has risen 30% since March as I have a single position in my 401(k). I am afraid that the market could correct and I would lose most of what I have made. What should I do? — B.M., Orlando

A: Diversification is always advisable in any investment plan, so having just one stock does increase your risk. I would seek the advice of a financial adviser to help you diversify your portfolio and limit your risk going forward. — Christopher Dale, Life After Grief Financial Planning, (407) 917-1913

Q: What is the difference between a Health Savings Account and Flexible Saving Account? — S.V., Kissimmee

A: The FSA must be spent in the same calendar year that the funds are deducted from your payroll, with a few small exceptions. The FSA account is a “use it or lose it” type of account. The HSA does not have to be spent until you choose to spend it. There are requirements such as a high-deductible health insurance plan, but if you qualify for the HSA, consider it. HSA funds could grow over time and assist with your health expenses in retirement, all tax-free. — Helen Von Doltern Fournier, AEGIS Advisors LLC., (407) 539-3939

Q.: I am young. How do I get started investing? — F.D., Odessa

A: You said you had a 401(k) at work so that is a good place to start investing. We also discussed budgeting to keep you on track. — Gregg Collier, Collier Financial Solutions, Inc., (352) 385-0073

Q: I have a 401(k) and two IRA annuities. Another adviser suggested I combine everything into one IRA for convenience. Is this a good idea? — G.A., Winter Springs

A: If your primary concern is convenience for your required minimum distribution processing and reporting, then yes. If your annuities have guarantees and features you want or need, you might want to keep them separate. — Dennis Nolte, Seacoast Investment Services, (407) 506-2173

Q: I’m in my late 40s and not in need of any income at this point, so is there any reason for me to be invested in bonds or bond mutual funds or ETF’s? — Name not given

A: The answer is most likely yes to some degree based on your comfort level with volatility in your portfolio. Regardless of the need for income, bonds offer an alternative asset class that can provide diversification to an all-equity portfolio while reducing the overall risk of your investments. You should sit down with your financial adviser to see the best allocation for your situation. — John Cash III, Hubb International, Florida, (407) 781-4400

Q: I want to add my daughter to my account so she can write checks for me. Should I do that? — L.R., Windermere

A: No because the assets could be included in a lawsuit if your daughter was sued. You should consider giving your daughter power of attorney so that she can act on your behalf when you become incapacitated or are unable to make your own financial decisions. — John West III, Spraker Wealth Management, (407) 478-7899

Q: I inherited an IRA from my brother, who passed away in January 2020 and was 12 years older than me. What are the rules about what I have to take out each year? — L.P., DeBary

A: The new SECURE Act requires non-spouse beneficiaries who are more than 10 years younger than the original account owner to liquidate the entire account within 10 years. You do not need to take an equal amount every year, so you will want to speak to a tax adviser about which years would make the most sense to take the money out. — Tommy Lucas, Moisand Fitzgerald Tamayo, LLC., (407) 869-6228, ext. 116

Q: I am retired with Social Security and a pension. I inherited some series EE savings bonds worth about $13,000 more than was paid for them. How much will I need to pay in taxes i I cash them out? — C.J., Sanford

A: Since you are married filing a joint tax return and based on your current income, you would pay 12% tax on those bonds up to $80,250 in total income in 2020. — Rhonda Shurtleff, Stonebridge Financial Group, (407) 695-7100

Q: I have an annuity worth $750,000. It started with $500,000. If I cash it in, will I have to pay income tax on the gain? — U.K., Orlando

A: Yes, if you surrender the annuity you would have to pay income tax on $250,000. This would be added to your other income for tax purposes. I suggest you reconsider cashing and talk with a certified financial planner to better understand what other options you might have. — Chris Toadvine, Certified Financial Group, (407) 869-9800

Q: Will I have to take a Required Minimum Distribution on my Roth IRA? — R.G. Oviedo

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A: Roth IRAs do not have required minimum distributions for the account owner or their spouse. But if you inherited your Roth IRA from a non-spouse, then starting in 2020 you will have 10 years to distribute your Roth IRA entirely. — Charlie Fitzgerald, III, Moisand Fitzgerald Tamayo, LLC., (407) 869-6228, ext. 102

Q: Are there any rules I can take advantage of in 2020 if I would like to donate to charity? — N.L., Orlando

A: Absolutely. Due to legislative changes passed earlier this year, you are now eligible to deduct up to 100% of your income as a charitable contribution. Going forward, you will be limited to 60% of your income. As a planning strategy this year, if you would like to make donations and are over age 59.5, you can take as much out of your IRA this year as you would like and can deduct all of those donations in 2020. — Colby Winslow, Creative Planning, Inc., (407) 280-3029

Q: With Required Minimum Distributions being suspended for 2020, am I still able to make a Qualified Charitable Distribution out of my IRA? — D.P., Orlando

A: Yes. Even though RMDs are waived for 2020, charity rules remain in effect. A QCD is not only a great way to give to a charity, it also reduces the overall balance of your IRA to lessen the amount of future RMD requirements. — Derrick Chandler, Moisand Fitzgerald Tamayo, LLC., (407) 869-6228, ext. 105

Have a question? E-mail Include your name (only your initials will be printed), hometown and phone. Questions are answered by Certified Financial Planners from the Financial Planning Association of Central Florida. Answers are for educational purposes only; you should also consult a financial professional. Questions and answers may be edited for space considerations.


Author: Mark Skoneki

Why Fastly's Stock Popped Today

Why Fastly’s Stock Popped Today

Shares of Fastly (NYSE:FSLY) rose Wednesday morning after President Trump signaled that he wants Congress to work on economic stimulus moves that could be passed quickly. That contradicted the statement he made on Tuesday that he wouldn’t negotiate with Congress on a new emergency stimulus measures until after the election. 

Shares of the cloud-computing services company were up by 14.4% as of 12:20 p.m. EDT. 

Fastly’s stock price surge appeared to be a bit of a positive overreaction by investors, considering the S&P 500 was up by just 1.3%. If a new economic stimulus package including checks for U.S. citizens gets passed sooner rather than later, it would be a good thing for the overall economy, but major share price jumps like the one Fastly just took are usually the result of company-specific news.

Tech companies have been particularly attractive to investors during this recession and pandemic, as many of them have been integral in helping businesses transition to remote work, supporting e-commerce, or keeping people connected to friends and family. Still, a huge one-day jump for Fastly stock based on the now-somewhat-brighter prospect of an economic stimulus deal appears excessive. 

Investors have been hoping for another stimulus package as the U.S. economy continues to suffer due to the pandemic. Jobs are slowly coming back in some sectors, but recent economic data released this week showed lower-wage jobs aren’t coming back as quickly, and the unemployment rate remains stubbornly high at just under 8%. Moreover, that figure doesn’t reflect the decline in labor force participation — millions of people who are out of work have stopped looking for jobs, which means they are no longer counted in the official unemployment figure.  

Multi-colored arrows on a white background.

Image source: Getty Images.

President Trump added uncertainty to the economic outlook when he abruptly ended stimulus negotiations between his administration and House Speaker Nancy Pelosi Tuesday, saying that the talks would only resume after the presidential election. Trump appeared to reverse course later in the evening, though, when he tweeted that Congress should immediately reroute unused funds from the previously passed CARES Act to help the ailing airline industry and to assist small businesses. 

The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support, & 135 Billion Dollars for Paycheck Protection Program for Small Business. Both of these will be fully paid for with unused funds from the Cares Act. Have this money. I will sign now!

The political climate is volatile, the president is still infected with COVID-19, and the U.S. is still fighting the pandemic and a major recession. This means that investors in Fastly — and shareholders of nearly any company — should try to keep a long-term perspective on their investments right now. Given that there’s no company-specific news behind Fastly’s stock price jump, it’s clear that some traders are willing to bid the tech company up based on the daily news. 


Author: Chris Neiger

Carnival Stock Is a Mess for the Rest of 2020

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