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  #1 (permalink)  
Old October 27th, 2010, 09:41 AM
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Default I have a question for Paul

First off I'm using the large font and bold for Ray. So please don't think I'm yelling. I saw the new article below on the home page. It's about NCL going public. I have never done an IPO do you know what is involved? I know you have working in the world of finance so I thought you would be a good person to ask. How many shares would I have to purchase of the IPO. I will have to look over the prospectus and see what I think.

What do you think about NCL going public. Do you think it's a good idea or is the company making a mistake? It's a very interesting move on NCL's part I'm wondering what the impact will be on the industry as a whole.

http://www.cruisemates.com/articles/news/
10-26-10
NCL Files for Proposed Public Stock Offering

NCL Corporation Ltd. announced today that it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission ("SEC") relating to a proposed initial public offering ("IPO") of its ordinary shares.
The registration statement relating to these securities has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. The offering will be made only by means of a prospectus, when available. The registration statement on Form S-1 may be accessed through the SEC's website at edgar.sec.gov.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
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Old October 27th, 2010, 07:17 PM
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Unforyunately...

The truth is that the regular people like us are rarely invited to participate in an IPO. The reason is because most stocks go up past the set price for the IPO. To be invited into an IPO you need to know the backing broker and have some kind of tie to the company.

For the general public, I NEVER recommend putting in an order to buy an IPO stock on the first day it trades before the market opens - you have NO idea what the stock is going to do.

It could open $20 and close at $10. This especially happens if a lot of people want the stock, but when they see they have made money from the set price they immediately sell.

I suggest you just sit back a few days and watch the stock to see what it is doing. It will find its market value soon enough.

I am not sure NCL is making much money these days anyway - haven't they had a few losing quarters in a row now?

Now, Royal Caribbean did GREAT yesterday, up $5 on better than expected earnings.
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Old October 28th, 2010, 10:21 AM
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Thanks for the information I knew you would have the insight. I figured it would be hard to get into the IPO. I don't want to jump in the first day anyway. I remember what happened with the chipotle IPO. It was undervalued and IPO investors made a ton of money. After that the stock found it's level and it wasn't nearly as valuable.

I haven't run the numbers on NCL and check the Earnings per share (EPS) or the price-to-earnings ratio (P/E) if I have no hope on the IPO I will wait for the charts. I use Big Charts and check the 200 & 50 day Exponential Moving Average (EMA) and the On Balance Volume (OBV). I'm not really good with the charts, there is so much more to them. I draw some trend lines also but that's about it. The more I learn about valuing stocks the more I know I don't know much. I still find it interesting and enjoy doing the analysis.
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Old October 28th, 2010, 11:38 AM
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I'm a bit concerned about the cruise companies building more and more ships.
Will they be able to fill them all at price where they can make a profit?

TM
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Old October 28th, 2010, 02:03 PM
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Well, KatLady. I had no idea you were so sophisticated as an investor.

I should not give investing "advice" - so just consider anything I say to be personal opinion.

NCL just put out an earnings announcement a few days ago - here it is..


NORWEGIAN CRUISE LINE REPORTS RESULTS
FOR THIRD QUARTER 2010



Improved pricing and the addition of Norwegian Epic


drive a 9.5% increase in Net Yield



Year-over-year EBITDA improvement continues


MIAMI – October 26, 2010 – Norwegian Cruise Line (NCL Corporation Ltd., “Norwegian” or “the Company”) today reported results for the third quarter ended September 30, 2010.

EBITDA for the third quarter of 2010 improved 21.4% to $184.1 million versus $151.6 million for the same period in 2009. The addition of Norwegian Epic to the fleet in June 2010 together with an improvement in Net Yield of 9.5% resulted in Net Revenue for the third quarter of 2010 increasing to $469.8 million from $390.0 million in the same period in 2009. The increase in Net Yield was a result of both improved passenger ticket pricing and increased onboard revenue per Capacity Day. Capacity days increased 10.1% with the addition of Norwegian Epic, which started regular service in mid-July, partially offset by the departure of Norwegian Majesty from the fleet in October 2009. Occupancy Percentage for the quarter was 113.2% versus 114.8% in 2009 with the slight decrease attributable to the initial phase-in period of Norwegian Epic. Net income for the quarter was $93.0 million on revenue of $634.1 million compared to net income of $85.6 million on revenue of $550.7 million in 2009.

Net Cruise Cost per Capacity Day increased 8.9% primarily due to initial start-up costs related to the introduction of Norwegian Epic (which included inaugural events and advertising and promotion expenses), timing differences of maintenance and repair expenses including dry-dock costs, and a 13.9% increase in the average cost of fuel to $507 per metric ton in 2010 from $445 per metric ton in 2009.

“Both improved ticket pricing across our fleet and the introduction of Norwegian Epic into regular service contributed to our strong results for the quarter,” said Kevin Sheehan, chief executive officer of Norwegian Cruise Line. “Our 21% improvement in EBITDA was achieved despite one-time costs related to Norwegian Epic’s start-up and inaugural activities, as well as an increase in the price of fuel. We continue to keep a razor-sharp focus on our cost discipline and containment measures.”

Interest expense, net of capitalized interest, increased to $46.2 million in the quarter compared to $25.8 million in 2009 due to higher average interest rates and an increase in borrowings related to the addition of Norwegian Epic. Other income improved to $1.6 million in 2010 versus an expense of $2.1 million in 2009 primarily due to gains on fuel derivatives in 2010 versus foreign currency losses in 2009.

Updates
The Company recently announced an agreement to build two new 4,000 passenger berth vessels for delivery in the spring of 2013 and 2014 at an aggregate contract price of approximately €1.2 billion. The ships will include signature elements from Norwegian’s current fleet, including many from the Company’s newest ship, Norwegian Epic. This is the Company’s first order for new vessels since 2006 and marks a return to a longstanding relationship with Germany’s Meyer Werft shipyard. “With the enthusiastic feedback we’ve received surrounding Norwegian Epic, and our guests’ continued passion for Freestyle Cruising, it was only natural that we extend what we’ve learned in our 40-plus years of innovation in the cruise industry into a new, exciting class of vessel,” commented Sheehan. “This agreement is an important step forward for Norwegian as we continue to build upon the excitement surrounding our brand.” The Company has commitments in place from a syndicate of banks for export credit financing in connection with this project.



Terminology and Non-GAAP Financial Measures
Berths. Double occupancy per cabin even though many cabins can accommodate three or more passengers.

Capacity Days. Berths multiplied by the number of cruise days for the period.

EBITDA. Earnings before interest, other income (expense) including taxes, impairment loss, and depreciation and amortization.

Gross Cruise Cost. The sum of total cruise operating expense and marketing, general and administrative expense.

Gross Yield. Total revenue per Capacity Day.

Net Cruise Cost. Gross Cruise Cost less commissions, transportation and other expense and onboard and other expense.

Net Cruise Cost Excluding Fuel. Net Cruise Cost less fuel expense.

Net Per Diem. Net Revenue per Passenger Cruise Day.

Net Revenue. Total revenue less commissions, transportation and other expense and onboard and other expense.

Net Yield. Net Revenue per Capacity Day.

Occupancy Percentage or Load Factor. The ratio of Passenger Cruise Days to Capacity Days. A percentage in excess of 100% indicates that three or more passengers occupied some cabins.

Passenger Cruise Days. The number of passengers carried for the period, multiplied by the number of days in their respective cruises.



Non-GAAP Information
To supplement the Company’s consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company also provides certain non-GAAP financial measures, including EBITDA, Net Revenue, Net Yield, and Net Cruise Cost.

We define EBITDA as earnings before interest, other income (expense) including taxes, impairment loss, and depreciation and amortization and is used by management to measure operating performance of the business. Management believes EBITDA, when considered along with other performance measures, is a useful measure as it reflects certain operating drivers of the Company’s business, such as sales growth, operating costs, marketing, general and administrative expense and other operating income and expense. EBITDA is also one of the measures used by the Company to calculate incentive compensation for management-level employees. This non-GAAP financial measure has certain material limitations, including:


* It does not include net interest expense. As the Company has borrowed money for general
corporate purposes, interest expense is a necessary element of its costs and ability to
generate profits and cash flows; and



* It does not include depreciation and amortization expense. As the Company uses capital
assets, depreciation and amortization are necessary elements of its costs and ability to
generate profits and cash flows.
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Old October 28th, 2010, 02:09 PM
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Now - the truth is that I don't know what this says because I don't where it says "gain/loss - $?????"

Last quarter they announced they lost a fair ampunt of money, as I recall, but it had to do with currency speculation losses (as I recall).

Keep this in mind...

Carnival has many more share outstanding than RCL, about 5-times more. There stock is at about the same level but the "market capitalization" of the company is five times bigger.

Right now I personally think Carnival is undervalued compared to RCL stock, but RCL is on a roll, they just had a great quarter.

But the stock market is a very odd duck these days. Individual companies are not performing based on results as much as the overall (macro) economic picture is affecting the overall market.

Everyone I talk to these days agrees the best way to trade this market is to buy low and sell high. Duh, right? But seriously, we just had a big runup in the market and I personally would not buy here. I would wait for a selloff, when things look really bad, and buy then.

This market has been oscillating in a trading range for two years now. The people who buy when things look the worst have fared the best.

I was buying RCL at $7.00/share. Now it is $40.
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Old October 28th, 2010, 04:25 PM
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I have always loved following the market I got my first mutual fund when I was 20 years old. My college degree has an option in finance. I directly asked you this question because I remembered that you worked for Motley Fool for a while. I really like that website for easy to read and understand financial information. Warren Buffet is my hero and I have a copy of the The Intelligent Investor by Benjamin Graham. However, that book is beyond my knowledge.

Here is my take on Carnival (CCL) VS Royal (RCL) based on today's numbers. This is just my personal opinion I do not do this for a living and I would not suggest people buy or sale a stock based on only this information.

CCL EPS $2.40 P/E 17.76 Current Stock Price $42.64
RCL EPS $1.97 P/E 22.68 Current Stock Price $39.90

Yahoo finance is were I got these numbers. Just based on this Carnival has better earnings and a lower price to earnings ratio. I'm also concerned with what TM said. In times of economic downtown the larger RCl ship will be an issue.

Thanks for the additional information on NCL. I'm concerned they are overexpanding. They put a lot of their future into the Epic and they are already pouring €1.2 billion into new ships. I do own Carnival Stock (I buy and hold alot). I'm not sure I will pick up any NCL. I don't buy a lot of indivdual stocks. I prefer Exchange Traded Funds (ETFs) I like being diversified. I like them over Mutual Funds because they trade mid day and I don't have to worry about as many fees.

Here is a chart of my favorite EFT SPY based on the S&P 500. I use SPY to engage the market as a whole. Based on this I see what you are saying there is a run up in the market. Also the OBV is pretty flat I think the market will adjust lower soon. Remember I'm not a professional and reading charts is complex soon Paul feel free to correct me if I'm wrong. In fact I have learned more from my mistakes then sucesses. It's fun to have someone to talk finance with my hubby always makes snoring sounds when I talk about stocks.
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Old October 28th, 2010, 05:02 PM
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I tend to be a "mo" trader (momentum). PE doesn't matter to me if a stock is going up, but right now I am guessing Carnival is the safer buy & hold stock. RCL just popped 5 points in one day.

I think if you are going to buy and hold for 2 years (say..) that CCL is a better bet because of the P/E and the fact that CCL pays a dividend (which makes it more popular right now).

If RCL dips below 35 I would probably buy in as a trade, but as an investment I personally think CCL is safer right now.
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Old October 29th, 2010, 04:05 AM
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Wow! This is certainly a very informative thread.

TM
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Mercury 4/2000+4/2006+7/2007
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Liberty of the Seas 5/2008+11/2009
Solstice 4/2009
Oasis 4/2010+4/13/2013
Allure 1/16/ 2011
Equinox 4/11/2011
Independence of the Seas 12/29/2013 Top-notch!
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Old October 29th, 2010, 05:36 AM
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Quote:
Originally Posted by Manuel View Post
Wow! This is certainly a very informative thread.

TM
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Old October 29th, 2010, 09:56 AM
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Quote:
Originally Posted by Paul Motter View Post
I tend to be a "mo" trader (momentum). PE doesn't matter to me if a stock is going up, but right now I am guessing Carnival is the safer buy & hold stock. RCL just popped 5 points in one day.

I think if you are going to buy and hold for 2 years (say..) that CCL is a better bet because of the P/E and the fact that CCL pays a dividend (which makes it more popular right now).

If RCL dips below 35 I would probably buy in as a trade, but as an investment I personally think CCL is safer right now.
The stock I buy sits in my retirement account. That is why I trade on value and not momentum. I don't like to trade on growth because growth can slow and if the stock is overvalued once growth slows the stock price drops like a rock. Also I find it much harder to know when to sell a stock VS when to buy it. I have never sold a stock at the high. I do sell it at a gain, but it always goes a little higher after I sell it.

Call and put options interest me and I follow when they expire because of the impact it has on the stock price. Do you use options? Do you short sale stock? That is another think that I have never done and it makes me nervous. I'm putting in a link on options to explain for other people following along.
http://www.stockbreakthroughs.com/articles/options.htm
Here is one explaining shorting a stock. Think sell high buy low, instead of buy low sell high.
http://stockbreakthroughs.com/articles/short-selling.htm
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Freedom of the Seas 2012
Carnival Splendor 2010
Carnival Freedom 2008
Carnival Elation 2007
Celebrity Infinity 2006
Carnival Ecstasy 2005
Carnival Paradise 2004
Star Princess 2002
Viking Serenade 1994
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Old October 29th, 2010, 02:31 PM
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Kat, one of these days you will be a rich tycoon.....

TM
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Century 4/1998
Mercury 4/2000+4/2006+7/2007
Sensation 4/2002
Infinity 4/2003
Summit 4/2004+4/2005
Carnival Liberty New Year's Eve 2007
Liberty of the Seas 5/2008+11/2009
Solstice 4/2009
Oasis 4/2010+4/13/2013
Allure 1/16/ 2011
Equinox 4/11/2011
Independence of the Seas 12/29/2013 Top-notch!
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