Carnival Corporation (NYSE:CCL), the company that once fell victim to engine room fires and a sinking ship, is investable once again. With a compelling turnaround story that is bearing fruit and bullish technicals, the stars seem to be aligning for this name.
Like how BP tanked after its fiasco in the Gulf of Mexico, Carnival sold off when news surfaced about the Costa Concordia catastrophe, and also upon news of engine room fires that left a ship out at sea for four days. As if these disasters weren't enough, the Ebola scare took a bite out of all the cruise lines, but hit Carnival the hardest because one of its passengers was the nurse of the first patient to die of the disease. However, since its low of $33.13 in October, CCL has been on a tear, reaching a 5-year closing high of $50.60 on June 26. If you bought in at the low, you would have watched the stock gain 53% over that time span. If you didn't, don't fret - I think there is still a lot of upside up for grabs. Read the rest on Seeking Alpha.
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The sole purpose of this post is to reiterate my opinion that Carnival should be bought. I first recommended the stock on June 11, and CCL just hit a 5 year high. Read that post here.
Before Tuesday's open, Carnival Corp. reported stellar earnings, earning $0.25 vs. the average estimate of $0.16. However, the company lowered their guidance, which made the stock close slightly lower on the day. This didn't scare Wedbush's James Hardiman, who on June 24th reiterated his $52 price target on the back of the big Q2 beat. If you read my previous post on the company, you know that I like Carnival's turnaround story - which is clearly beginning to bear fruits. I also like the chart technically. As shown below, after breaking out to the upside above resistance at $49.08, it retreated and found support at that same level. I think that the stock is mid-breakout, so there is still upside in this name. Perhaps just wait for a pullback. |