IN FOCUS: CARNIVAL ‘ THE HIGH OIL PRICE HAS MADE ITS SHARES CHEAP’
I recently bought into Carnival, the world’s biggest cruise company. It has several brands. Cruises are very popular and very cost-competitive. They appeal to an ageing population, but Carnival is quite good at broadening its audience.
Recently, the stock has not been performing too well, which is exactly why I have bought now – I like to get a good company for a decent price. The reason for the lack of performance is the current high oil price, which has led to a nice opportunity. I think Carnival is a great holding, especially for people who own shares in BP or Shell, as it will act as a kind of hedge if the oil price falls back.
Cruising is also not an obvious business that will be disrupted by the internet, by giants such as Amazon and so on. If anything, the internet will increase direct and impulse bookings, which should boost the company’s profit margins.
I think it is a good moment to buy and we are starting to see the share price improve. We have about 1pc of the fund invested in it and are slowly building our position. It’s about our 29thlargest holding. We will be keeping a close eye on it.