The entity has a beta of -0.8196. Let's try to break down what Carnival's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Carnival will likely underperform. The beta indicator helps investors understand whether Carnival moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Carnival deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns.
There are currently many different techniques concerning forecasting the market as a whole as well as
predicting future values of individual securities such as Carnival. Regardless of method or technology, to accurately forecast the stock or bond market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the
market sentiment and impact your forecasting results.
Predictive Modules for Carnival
Sophisticated investors, who have witnessed
many market ups and downs, frequently view the market will even out over time. This tendency of Carnival's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Carnival in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Carnival. Your research has to be compared to or analyzed against Carnival's peers to derive any actionable benefits. When done correctly, Carnival's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Carnival.
How important is Carnival's Liquidity
Carnival
financial leverage refers to using borrowed capital as a funding source to finance Carnival ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Carnival financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Carnival's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Carnival's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Carnival's total debt and its cash.
Carnival Gross Profit
Carnival Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Carnival previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Carnival Gross Profit growth over the last 10 years. Please check Carnival's
gross profit and other
fundamental indicators for more details.
Is Carnival valued adequately by the market?
Carnival price pull down over the last few months could raise concerns from stakeholders as the firm it trading at a share price of
14.13 on very low momentum in volume. The company directors and management were not very successful in positioning the firm resources to exploit market volatility in
August. However, diversifying your holdings with Carnival or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 30 days investing horizon is currently 4.83. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the Carnival partners.
Returns Breakdown
| Return on Assets | 0.0704 |
| Return on Equity | 0.12 |
| Return Capital | 0.0848 |
| Return on Sales | 0.17 |
Will Carnival growth be rational after the hike?
The standard deviation is down to 4.99 as of today. Carnival exhibits very low volatility with skewness of 0.51 and kurtosis of 1.23. However, we advise investors to further study Carnival technical indicators to make sure all market info is available and is reliable.
The Current Takeaway on Carnival Investment
While some firms in the travel services industry are either recovering or due for a correction, Carnival may not be performing as strong as the other in terms of long-term growth potentials. The inconsistency in the assessment between current Carnival valuation and our trade advice on Carnival is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Carnival.
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Carnival. Please refer to our
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