Insider buying can provide clues about a stock’s next move. Insiders sell company stock for many reasons. Yet they only buy stock for one reason – they expect it to rise.
In this report, we are going to highlight some interesting insider buying at Carnival Corporation & PLC (CCL:US). Carnival is a leading operator of cruise ships. The company, which owns a number of brands including Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, P&O Cruises, and Costa Cruises, operates in North America, Europe, Asia, and Australia. It is listed on both the New York Stock Exchange and the London Stock Exchange and currently has a market capitalization of $16.19 billion.
Carnival Corp: Insider Buying
Our data shows that on May 25, board member Randall Weisenburger picked up 100,000 shares at a price of $11.755 per share. This trade cost the insider $1.18 million and increased his holding 870,000 shares.
This purchase is worth highlighting for a couple of reasons. Firstly, it’s a substantial buy. The fact that Mr. Weisenburger has spent over $1 million on stock, and boosted his holding by over 10%, suggests that he is confident the stock will move higher.
Secondly, our research reveals that Mr. Weisenburger has considerable investment experience. Currently, he is Managing Member of Mile 26 Capital LLC, a private investment firm. Previously, he was a founding member of Wasserstein Perella & Company Inc., a boutique investment bank. This background means he is likely to have a good understanding of the investment potential here.
Carnival’s Q1 results showed that the company is recovering from the pandemic.
For the first three months of 2022, revenue per passenger cruise day (PCD) increased approximately 7.5% compared to a strong 2019. This was driven by exceptionally strong onboard and other revenue. Meanwhile, the company said that it expects monthly adjusted EBITDA to turn positive at the beginning of its summer season. At the end of the period, the group had $7.2 billion of liquidity.
Carnival also noted that as of March 22, 2022, 75% of the company's capacity had resumed guest cruise operations. It added that since the middle of January, it had seen an improving trend in weekly booking volumes for future sailings.
"We ended the first quarter of 2022 with $7.2 billion of liquidity. Looking forward, we believe we remain well positioned given our liquidity and the continued improvement expected in adjusted EBITDA, along with the expected build in customer deposits, as we progress toward resuming full fleet operations," commented CFO David Bernstein.
In light of the recovery here, we see the insider buying as a bullish indicator.