Picked up Carnival Cruise Lines at $31.29 today. Carnival has steadily grown free cash flow over the last decade. My Intrinsic Value calcs place a value at about $58, so I’m getting it at a significant discount. Still, this was a tough decision. Here was a few things weighing on me:
-CCL has already nearly doubled since its Bear market low. Yet that’s no reason to avoid. (Price does not equal Value)
-I’m not in the mood to buy stocks. I’ve been expecting the market to take a breather (or worse) and present better prices. Mr. Market just doesn’t want to comply.
-Certain bondholders have a right to convert to common stock at higher prices. This will act as a negative as prices rise.
-Carnival is not an Energy or Healthcare stock, which my portfolio is full of and they’ve done so well for me this year. Maybe some diversification is a good thing.
Despite any reservations, I went into CCL with my normal 3% of portfolio in this position.
In other news, my holding Dish Network (NYSE: DISH), the No. 2 U.S. satellite TV provider, beat Wall Street forecasts by posting a gain of 241,000 subscribers in the third quarter and surprised investors with a plan to pay shareholders a special dividend of $2 a share. DISH hit a 52-week high today on the news.