Shares of cruise ship operator Carnival dipped fractionally Thursday. But investors probably don't care a bit after it doubled its price in just over two months. Leisure and travel companies are outperforming as consumers and business travelers lift hotels, airlines, cruise lines and entertainment companies. On Thursday, the IBD SmartSelect Composite Rating for Carnival stock rose to a terrific, near-best 96, up from 94 the day before.
The upgrade means the stock is now outpacing 96% of all other stocks in terms of key performance metrics and technical strength. The best stocks to buy and watch tend to have a 95 or better grade as they launch a significant move.
Carnival Stock Popped From 11.30 Buy Point
Carnival has now climbed above a proper buy zone after clearing the 11.30 buy point in a cup-without-handle base. Watch for a fresh entry point such as a three-weeks-tight pattern or bouncing off its 50-day or 10-week line. Carnival stock closed at 8.72 on April 27. On Thursday, it rose as high as 17.75 intraday and closed at 17.16, down 13 cents for the day.
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Among its other key ratings Carnival stock has a best-possible A+ Accumulation/Distribution Rating. That means institutional investors, such as mutual funds and pension funds, have jumped in feet first over the last 13 weeks.
Must Prove It Can Generate Big Profits
One weak spot is the company's 63 Earnings Per Share Rating, out of 99. The EPS Rating tracks quarterly and annual earnings-per-share growth. The 63 rating reflects weak profits in the last couple of years during the pandemic shutdown. Look for that to improve to 80 or better to show it's in the top 20% of all stocks.
The company reported a 31 cents per share loss last quarter on a 105% surge in revenue to $4.91 billion. It was the fourth quarter in a row of triple-digit revenue growth ranging up to 688%.
Carnival stock holds the No. 3 rank among its peers in the 45-stock Leisure-Services industry group. Rival Royal Caribbean Group is the No. 2-ranked stock in the group. Health and wellness products maker OneSpaWorld is No. 1 in the group.
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