Sunday share tips: Carnival, Lo-Q

23rd Dec 2012 23:02

Carnival shares sank by 6 per cent after the cruise operator reported a fall in 2012 profit and disappointed the City with its outlook for 2013. Have the falls presented a buying opportunity? True enough, the company´s "net yield" at stable currency rates fell 4.5 per cent, but that was compared with company guidance for a 5 per cent to 6 per cent fall. This is an important figure. It is a similar metric to revenue per available room, or Revpar, for hotel groups, so the fall is a negative. As well, it is too late to buy the shares to qualify for the special dividend. The company´s prospective yield in 2013 is 2.9 per cent. Nevertheless, the prospects for the global cruise industry are very bright - as people who take these holidays are one of the largest growing demographics in the world. Furthermore, cruise ship penetration is also relatively small, with less than a quarter of the US population ever going on a cruise. Carnival and Riyal Carribean account for 72 per cent of the global cruise market. Carnival is well managed and is operating in a growing market. Hopes for future cash returns should provide support for the shares. Buy, says The Sunday Telegraph´s Questor team. Queue-beating company Lo-Q has also more than tripled in price from 119p to 380p since The Financial Mail on Sunday´s Midas column recommended it in May 2010. The shares should gain further momentum following this month's £13.7m acquisition of American rival accesso. Lo-Q designs gadgets and phone services that help theme park visitors avoid spending hours queuing for attractions. In the year to October 2010, profits were £2.4m, last year they were £2.8m and figures for the year to October 2012 are expected to show profits of £3.3m when they are announced early next year. For Midas column: " The accesso deal should boost Lo-Q's figures and brokers estimate profits of £4.5m for the year to next October with further increases in 2014. The shares have done well and investors should sell half of their stock to take advantage of the strong performance. Keep the rest in the hope that accesso delivers on its promises."Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.AB