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May 16, 2006
Carnival's leaky ship, Tues., May 16, 2006, 5:33 PM
One of the Cara 100 companies, Carnival Corp (NYSE: CCL) takes millions of traders on vacation every year " even when the market is going up. Today CCL had a leaky ship. It was a different kind of vacation.
Yes, CCL stock took quite a hit, down -8.5 pct on the day, as management tempered growth expectations for the balance of this year and next. But if you hold stocks in the Consumer Discretionary Spending (sector 25) space, get used to it.
Heavy fuel costs are likely to depress profits unless these "producers" can pass along the added cost to their consumer. If they can, it's called pricing power; if they can't, it's going to lead to a fall off in top line growth.
The CCL shares will work through a cycle bottom (Daily, Weekly and Monthly RSI below 30), or Accumulation Zone as I call it, sometime in the next few months, I believe. Then I'll be a buyer. My expectations for gain will be high because this is a superb company.
Cara 100 GICS 25 Carnival Corp. (CCL) (CCL) Financial Analysis
Posted by Posted by Bill Cara on May 16, 2006 05:33:21 PM | Category: 25 Cons Discretionary