Carnival Corporation (CCL): Stock With Unusual Social Activity

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Carnival Corporation ( CCL) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Carnival Corporation as such a stock due to the following factors:

  • CCL has 13x the normal benchmarked social activity for this time of the day compared to its average of 2.56 mentions/day.
  • CCL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $158.0 million.

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.

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More details on CCL:

Carnival Corporation operates as a cruise and vacation company worldwide. The company operates in two segments, North America; and Europe, Australia, and Asia. The stock currently has a dividend yield of 2.5%. CCL has a PE ratio of 25.3. Currently there are 4 analysts that rate Carnival Corporation a buy, 2 analysts rate it a sell, and 10 rate it a hold.

The average volume for Carnival Corporation has been 4.3 million shares per day over the past 30 days. Carnival has a market cap of $23.7 billion and is part of the services sector and leisure industry. The stock has a beta of 0.86 and a short float of 6.9% with 7.06 days to cover. Shares are up 2.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Carnival Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • CCL's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 2.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.19 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • CARNIVAL CORP/PLC (USA)'s earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, CARNIVAL CORP/PLC (USA) reported lower earnings of $1.38 versus $1.67 in the prior year. This year, the market expects an improvement in earnings ($1.66 versus $1.38).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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