NEW YORK (TheStreet) -- Carnival Cruise Lines (CCL) is still fighting bad publicity from February's "poop cruise," in which a ship called the Carnival Triumph suffered a fire traveling in the Gulf of Mexico and had to be towed to port while the whole world watched.
So far, however, the stock is holding up to the heat, thanks in part to a lot of investment support by hedge funds. It doesn't hurt that the chairman of Carnival, Mickey Arison, also owns the Miami Heat basketball team.
CNN's "Anderson Cooper 360" reported this week on documents it claimed prove the cruise line knew about problems on the Triumph before its fire -- charges Carnival quickly tried to refute.
A class-action lawsuit was filed against Carnival within days of the Triumph returning to port on Feb. 14, after the line offered passengers refunds, vouchers for future cruises and other compensation.The Triumph's problems came a year after a ship owned by a Carnival subsidiary, the Costa Concordia , ran aground off the coast of Italy and another Costa ship, the Allegre, caught fire off the Seychelles, knocking out its power. in September, and has just begun recovering. It hit a low on Oct. 9 of $36.51 but has since risen to its current price of just ovre $38. Its most recent earnings report this week showed a profit of $35 million, or 4 cents per share. (RCL) stock is up 35% so far this year, and Norwegian Cruise Line Holdings (NCLH) is up 34%. Hedge funds may be seeing the potential for Carnival to meet its rivals' gains if it can put its troubles behind it. The question is whether it has. At the time of publication the author had no position in any of the stocks mentioned. Follow @danablankenhorn This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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