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This week, the indexes ended lower. We saw an initial rise in stocks followed by a selloff after the fed made their decision. Let's ride the waves 🤙🏽.
Here's a look at the 5-day change for ETF's SPY (or the S&P 500), DIA (or the Dow 30), and QQQ (or the Nasdaq 100).
SPY : -2.19%, closed at $459.87
DIA : -1.61%, closed at $353.63
QQQ : -3.28%, closed at $384.91
Rivian 🚗
This EV company's stock was surging last month with no real data on how the company is doing. It reached a high of $179.47 with no true value. High expectations, hype and hope that it is going to do well contributed to this dramatic increase. It delivered a miss this week and the stock plunged further to $97.70. This is why it is important to not feed into hype although the surge can be tempting to jump into for a quick buck. Consider revisiting our investing criteria 😊👍.
Rate Hikes 💵
The Fed stated that they are going to increase interest rates. What does this mean? This means that money is going to be more expensive to borrow. It can affect mortgages, car loans, etc. How does it affect companies? It can limit growth and therefore revenue because it is more expensive to borrow money.
Debt Ceiling 🏋️♀️
President Biden signed a debt ceiling increase, preventing the first ever US default. What is the debt ceiling? It is a legislative limit on the amount of national debt that can be incurred by the U.S. Treasury, limiting how much money the federal government may pay on the debt they already borrowed.
Earnings
Here's earnings for the upcoming week:
Carmax Inc (KMX): 2021-12-22 Before Market Open (Estimated EPS: 1.5).
Paychex Inc (PAYX): 2021-12-22 Before Market Open (Estimated EPS: 0.79).
Cintas Corporation (CTAS): 2021-12-22 Before Market Open (Estimated EPS: 2.62).
General Mills (GIS): 2021-12-21 Before Market Open (Estimated EPS: 1.05).
Micron Technology (MU): 2021-12-20 After Market Close (Estimated EPS: 2).
Nike Inc (NKE): 2021-12-20 After Market Close (Estimated EPS: 0.63).
H&R Block (HRB): 2021-12-20 After Market Close (Estimated EPS: -1.06).
Carnival Corp (CCL): 2021-12-20 Before Market Open (Estimated EPS: -1.43).
Carnival Corp. (CCL) 🛳
CCL is a cruise line! This cruise line offers many desirable locations to travel to. Some of which include The Bahamas, Mexico, The Caribbean, Hawaii and other countries! There is perhaps no better marketing than showing their customers all of the wonderful places they can visit. Carnival also provides entertainment on their cruises along with great food. This company primarily makes their money off of selling these experiences to travelers and vacationers. Although all of this sounds attractive, travel has been negatively impacted by covid. If people can't travel, they can't book cruises. If cruises are not being booked, CCL is not making money and that is not attractive. Have their fundamentals went overboard? Let's see! 🔎
Annual Revenue:
2020-11-30 : $5.59B
2019-11-30 : $20.83B
2018-11-30 : $18.88B
2017-11-30 : $17.51B
2016-11-30 : $16.39B
Earnings History:
2021-09-24 : miss (Estimate: -1.48, Actual: -1.75).
2021-06-24 : miss (Estimate: -1.6, Actual: -1.8).
2021-04-07 : miss (Estimate: -1.54, Actual: -1.79).
2021-01-26 : miss (Estimate: -1.94, Actual: -2.02).
Historical Stock Price Returns:
3-month : -21.13%
1-year : -16.49%
5-year : -64.08%
Carnival Corp (CCL) Max Chart (Yahoo Finance)
This is probably how people who invested in this company feel like 👆
CCL's chart looks like it has overall trended neutral and then sank due to covid restrictions. Their annual top-line revenue was steadily increasing, but then significantly dropped in 2020. We also see that CCL has delivered consistent misses during their last 4 earnings. Based on the assessment above, we see that smart money is not investing in this stock. The success of this company relies on travel and therefore it is subject to covid conditions which we all know is very volatile. When we invest in long-term holds, we typically like to see an increasing annual top-line revenue and a consistent, strong upwards trend. Perhaps we can invest in other stocks that will get us better returns and then take the profits to treat ourselves to a cruise 😉.
Want to learn how to make monthly passive income, receive higher returns during bull markets and even profit off of stocks that are trending downwards?
Who Competes with CCL?
A few of CCL's competitors include Walt Disney Co (DIS), Royal Caribbean Cruises Ldt. (RCL) and Norwegian cruise line holdings Ldt. (NCLH).
Discord Launched!
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If you're a paid subscriber, remember to check in on positions in the wheel in your dashboard or in the course pages! Until next time!
- Call to Leap Team