We recently published an article titled, Jim Cramer on Netflix and Other Stocks. In this article, we are going to take a look at where Carnival Corporation & plc (NYSE:CCL) stands against other stocks discussed by Jim Cramer.
Recently, Mad Money’s host, Jim Cramer addressed what he called a “ridiculous plethora of sell-side downgrades,” noting that the Dow Jones Industrial Average fell by 0.94%, the S&P 500 decreased by 0.96%, and the Nasdaq Composite dropped by 1.18% on Monday. While he acknowledged the session’s poor performance, he cautioned that paying too much attention to downgrades can be detrimental for long-term investors.
Cramer urged investors not to get overly influenced by the negative sentiment on Wall Street and emphasized the importance of staying committed to strong companies, even when their stock prices experience volatility. He recounted the history of the bull market, stating:
“When I look at the history of this incredible bull market, and it has been an incredible bull market, it’s littered with buy-to-hold, hold-to-sell, buy-to-hold, hold-to-sell. These downgrades scare you out of amazing stocks at levels that may temporarily be too high, but will recover later. If you listen to the downgrades, though, you’ll never recover with it.”
In discussing the challenges investors face, Cramer pointed out that many get rattled by analyst downgrades and might sell their shares in solid companies, which can make it difficult to buy back in later.
“In the last decade, the toughest thing to do is to hold on to good stocks. But analysts and commentators love to take aim at big long-term winners. Their jeremiads have scared so many people out of some amazing gains.”
He observed that complacency can be prevalent on Wall Street, with bullish investors often overlooking risks while bearish ones miss out on potential opportunities. For those considering action based on a downgrade, Cramer advised waiting for a bounce to sell, but he noted that timing such moves is “incredibly hard,” even for seasoned traders.
Cramer emphasized that when analysts downgrade stocks that have already taken a hit and overlook positive aspects, it can create a challenging environment. However, he believes it is still possible to profit. Here’s what he said:
“I need you to understand that when analysts downgrade after stocks have already been hammered, when really good investors ignore the positives, then, it may be a grim time. But not so grim that we can’t make money by focusing on the fundamentals of the companies. And not just the economy, the Fed, interest rates and oil.”
Our Methodology
For this article, we compiled a list of 15 stocks that were mentioned by Jim Cramer during his episodes of Mad Money on October 7 and October 8. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Cramer Says Carnival Corporation & plc (NYSE:CCL) Is Good
Carnival Corporation & plc (NYSE:CCL)
Number of Hedge Fund Holders: 53
Carnival Corporation & plc (NYSE:CCL) is a prominent provider of leisure travel services, operating on a global scale. It is recognized for its diverse portfolio of cruise brands, which includes Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises, and Cunard. When Cramer was asked by a caller if he liked the stock, he commented he liked Viking and Royal Caribbean better.
“Well, look, I don’t know about the actual weather forecast and where things are going to go. I do know that I do prefer Royal Caribbean. I think it’s got better balance sheets, got more momentum. But Carnival’s good… Look, these cruise stocks are really driven. They’re all good, but Royal Caribbean is my favorite. I also like Viking.”
It should be noted that in recent quarters, Carnival Corporation (NYSE:CCL) has seen a significant resurgence in business activity, with ships once again filled to capacity and bookings reaching unprecedented levels. The company reported remarkable results in its fiscal third quarter, achieving record figures in multiple categories. Revenue reached $7.9 billion, a 14% increase compared to the previous year. Additionally, operating income soared to $2.2 billion, marking a 34% rise year-over-year.
Adjusted EBITDA also experienced strong growth, totaling $2.8 billion, a 25% increase from the same quarter last year. Total customer deposits reached $6.8 billion, which points to strong future business prospects. For the upcoming fiscal fourth quarter, Carnival Corporation (NYSE:CCL) forecasts adjusted EBITDA to increase by 20%, projecting a figure of approximately $1.14 billion.
Additionally, the company expects adjusted EPS of $0.05, alongside a 3% growth in capacity compared to the prior year, with available lower berth days (ALBDs) estimated at 24 million. Furthermore, new yields are anticipated to rise by 7%, highlighting the company’s ongoing recovery and demand for cruise experiences.
Overall, CCL ranks 12th on our list of stocks discussed by Jim Cramer. While we acknowledge the potential of CCL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CCL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.