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A Cruise Might Not be the Remedy as Insiders Sell Carnival

David Becker
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A vacation cruise might not be the remedy after the recent Winter frigid weather, as insiders line up to exit Carnival.

Carnival Corp (NYSE:CCL) operates as a cruise company worldwide. It operates in two segments, North America; and Europe, Australia, & Asia. The company offers various cruise products and services through a fleet of 101 cruise ships under the brand.

The stock price rallied into the end of the year as earnings beat expectations driving up the stock. The first quarter has been unkind, and recent problems with specific cruises have damaged the Carnival brand.

The 52-week range of (NYSE:CCL) is $31.44 – $41.89, and the stock hit a fresh 52-week high in January of 2014. Earnings declined 88% quarter over quarter, and the three-year growth rate of earnings is a negative 15%. Sales were flat quarter over quarter, and the three year growth rate of sales was also flat. The company’s debt to equity ratio is 33% and a profit margin of 8%, and a price to earnings ratio of 25.

Recent insider sales should give investors pause. Chairman of the Board Micky Arison sold 1,202,425 shares of this cruise ship operator, starting on February 28, and ending on March 24, 2014 for $40.14, generating $48.26 million from the sale. There have been no insider buys of the company stock in 2014.

The technical picture shows at that is range bound between the 20-day moving average near $38.80 and the 200-day moving average near $36.50. Momentum on the stock is negative with the MACD (moving average convergence divergence) index printing a reading that is in negative territory with a negative trajectory that forecasts weak future price action. The RSI is printing near 46, which is on the lower end of the neutral range.

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