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Here’s Why Royal Caribbean, Carnival Stock Are Good Buys

Yes, Carnival reported a bigger-than-expected loss but in this case, unlike taking a cruise, it’s the destination not the journey for the cruise lines.

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Yes, Carnival reported a bigger-than-expected loss but in this case, unlike taking a cruise, it's the destination not the journey for the cruise lines.

For the past two years, since the covid pandemic hit in late-February 2020, the cruise industry has taken one punch after another. And, while the situation has improved from the extended period when cruises were not allowed to sail from United States ports, that does not mean that it's back to 2019 for Royal Caribbean International (RCL) - Get Royal Caribbean Group Report, Carnival Cruise Line (CCL) - Get Carnival Corporation Report, and Norwegian Cruise Line (NCLH) - Get Norwegian Cruise Line Holdings Ltd. Report.

The industry has done a remarkable job bringing operations back to near-normal. All three cruise lines not only have put all their ships back in service, they're also still moving forward with plans for new ships and other investments including improvements to private islands, and developing new ports.

That being said, Carnival just reported its second-quarter earnings and the market did not like the numbers at all. Shares of all three cruise lines were down double digits on Sept. 30, but traders clearly missed that aside from rising costs and a loss (both of which were expected) the cruise line largely delivered good news.

Image source: Shutterstock

Carnival Did Well in Areas it Controls  

Carnival reported a GAAP net loss of $770 million for the quarter. That was driven by higher costs with the company specifically citing advertising expenses and having some of its fleet unavailable to produce revenue.

While the company's year-to-date adjusted cruise costs excluding fuel per ALBD during 2022 has benefited from the sale of smaller-less efficient ships and the delivery of larger-more efficient ships, this benefit is offset by a portion of its fleet being in pause status for part of the year, restart related expenses, an increase in the number of dry dock days, the cost of maintaining enhanced health and safety protocols, inflation and supply chain disruptions. The company anticipates that many of these costs and expenses will end in 2022.

If you're investing in any cruise line you have to do so on a very long-term basis. That makes profitability less of a concern than the company building back its business and Carnival showed some very positive signs in that direction.

  • Revenue increased by nearly 80% in the third quarter of 2022 compared to second quarter 2022, reflecting continued sequential improvement.
  • Onboard and other revenue per PCD for the third quarter of 2022 increased significantly compared to a strong 2019
  • Total customer deposits were $4.8 billion as of August 31, 2022, approaching the $4.9 billion as of August 31, 2019, which was a record third quarter.

  • New bookings during the third quarter of 2022 primarily offset the historical third quarter seasonal decline in customer deposits ($0.3 billion decline in the third quarter of 2022 compared to $1.1 billion decline for the same period in 2019).

Carnival (and likely all the cruise lines) is being hurt by prices generally being depressed and some passengers paying for their trips using future cruise credits from cruises canceled during the pandemic. That's not really what matters though. Carnival has been increasing passenger loads and getting people back on its ships.

"Since announcing the relaxation of our protocols last month, we have seen a meaningful improvement in booking volumes and are now running considerably ahead of strong 2019 levels," Carnival CEO Josh Weinstein said. "We expect to further capitalize on this momentum with renewed efforts to generate demand. We are focused on delivering significant revenue growth over the long-term while taking advantage of near-term tactics to quickly capture price and bookings in the interim."

Basically, cruise prices are cheap right now because it's more important to get customers back on board than it is to maintain pricing integrity. That's a tactic that could hurt long-term pricing, but the cruise industry is less vulnerable than other vacation options because there have always been large pricing variations based on the calendar and the age of the ship being booked.

It's a Long Voyage for Cruise Lines

Carnival was trading at its 52-week low after it reported. That's a pretty major overreaction given that the cruise industry was barely operating in the fall of 2021.

Yes, the industry has a long way to go. All three major cruise lines took on billions of dollars of debt during the pandemic. Refinancing that debt in an environment with higher interest rates is a challenge, but it's one Carnival (and its rivals) have been meeting.

That has come with some shareholder dilution. Carnival sold $1.15 billion in new stock during the quarter, but the company has over $7.4 billion in liquidity. Weinstein is optimistic (he has to be, that's part of his job) about the future.

"During our third quarter, our business continued its positive trajectory, achieving over $300 million of adjusted EBITDA and reaching nearly 90% occupancy on our August sailings. We are continuing to close the gap to 2019 as we progress through the year, building occupancy on higher capacity and lower unit costs," he said.

Usually it's easy to dismiss a CEO making upbeat comments after posting a loss, but in this case, Carnival has basically followed the recovery path it laid out once it returned to sailing. Both Royal Caribbean and Norwegian have followed similar paths and while meaningful shareholder returns may take time, these are strong companies built for the long-term that made a lot of money before the pandemic and should do so again. 

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Elon Musk’s says the Boring Company to reach $1 trillion market cap by 2030

Musk said there’s really only one roadblock to this company achieving this mega-cap value.

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Elon Musk wants to create and control an artificial superintelligence and guide humanity in an effort to colonize Mars. But before we get there, he wants to solve the problem of traffic right here on Earth. 

In 2016, the tech billionaire tweeted himself into a new company: "Traffic is driving me nuts. I am going to build a tunnel boring machine and just start digging..." he wrote. A series of tweets followed this proclamation as the idea germinated and cemented in Musk's head: "It shall be called 'The Boring Company.' I am actually going to do this."

Related: Elon Musk is frustrated about a major SpaceX roadblock

The firm's goal is to "solve the problem of soul-destroying traffic," by creating a series of underground transportation tunnels. Taking transportation underground, the company says, should additionally "allows us to repurpose roads into community-enhancing spaces, and beautify our cities."

The tunneling company broke ground on its first project in Feb. 2017 and has since completed three projects: the Las Vegas Convention Center (LVCC), the Hyperloop Test Track and the R&D Tunnel. It is currently working on a 68-mile Las Vegas Loop station that will eventually connect 93 stations between Las Vegas and Los Angeles. Once in operation, the Vegas Loop will transport 90,000 passengers every hour, according to the company. 

More Elon Musk News:

Part of Musk's proposition is that, with the right technology, he can make tunneling a quick and relatively inexpensive process. The company's Prufrock machine allows Boring to "construct mega-infrastructure projects in a matter of weeks instead of years." The machine can mine one mile/week, with new iterations expected to further increase that output. 

Elon Musk is looking to transform traffic and transportation with one of his many ventures. 

Bloomberg/Getty Images

By 2030, Youtuber and investor Warren Redlich wrote in a post on X, Boring will have more than 10,000 miles of tunnel. By 2035, he said, that number will rise to 100,000. With that increase in tunnel space, Redlich thinks that Boring will IPO by 2028 and hit a $1 trillion market valuation by 2030. 

Musk said that this bullish prediction might actually be possible. 

"This is actually possible from a technology standpoint," he wrote in response. "By far the biggest impediment is getting permits. Construction is becoming practically illegal in North America and Europe!"

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NULISA: Ultra-Sensitive Immunoassay Platform for Profiling Fluid-Based Neurodegenerative Protein Biomarkers

Efforts to identify biomarkers for neurodegenerative disease have been hampered by the lack of a proteomic tool with the required sensitivity to detect…

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Broadcast Date: October 11, 2023
Time: 8:00 am PT, 11:00 am ET, 17:00 CET

Efforts to identify biomarkers for neurodegenerative disease have been hampered by the lack of a proteomic tool with the required sensitivity to detect very low concentrations of brain-derived proteins in plasma or serum and the ability to multiplex many analytes in a single assay.

In this webinar, we will describe the NULISA Platform, a novel immunoassay with attomolar level sensitivity and high multiplex capability. The performance of the NULISA assay was benchmarked to existing immunoassay platforms and Dr. Zetterberg will present data from his evaluation of the NULISA system’s ability to detect serum biomarkers associated with Alzheimer’s disease. Dr. Henrik Zetterberg is a leading researcher in the field of Alzheimer’s disease who has spent the past 10 years focused on the discovery and validation of blood-based biomarkers for CNS disorders.

 

During the presentation we will offer a chance to pose questions to our expert panelists. Any questions submitted during the webinar will be answered at a later date.

Doug Hinerfeld, PhD
Senior Director of Application Support
Alamar Biosciences
Henrik Zetterberg
Henrik Zetterberg, MD, PhD
Professor of Neurochemistry
University of Gothenburg

 

The post NULISA: Ultra-Sensitive Immunoassay Platform for Profiling Fluid-Based Neurodegenerative Protein Biomarkers appeared first on GEN - Genetic Engineering and Biotechnology News.

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Jellyfish shown to learn from past experience for the first time

Even without a central brain, jellyfish can learn from past experiences like humans, mice, and flies, scientists report for the first time on September…

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Even without a central brain, jellyfish can learn from past experiences like humans, mice, and flies, scientists report for the first time on September 22 in the journal Current Biology. They trained Caribbean box jellyfish (Tripedalia cystophora) to learn to spot and dodge obstacles. The study challenges previous notions that advanced learning requires a centralized brain and sheds light on the evolutionary roots of learning and memory.

Credit: Jan Bielecki

Even without a central brain, jellyfish can learn from past experiences like humans, mice, and flies, scientists report for the first time on September 22 in the journal Current Biology. They trained Caribbean box jellyfish (Tripedalia cystophora) to learn to spot and dodge obstacles. The study challenges previous notions that advanced learning requires a centralized brain and sheds light on the evolutionary roots of learning and memory.

No bigger than a fingernail, these seemingly simple jellies have a complex visual system with 24 eyes embedded in their bell-like body. Living in mangrove swamps, the animal uses its vision to steer through murky waters and swerve around underwater tree roots to snare prey. Scientists demonstrated that the jellies could acquire the ability to avoid obstacles through associative learning, a process through which organisms form mental connections between sensory stimulations and behaviors.

Learning is the pinnacle performance for nervous systems,” says first author Jan Bielecki of Kiel University, Germany. To successfully teach jellyfish a new trick, he says it’s best to leverage its natural behaviors, something that makes sense to the animal, so it reaches its full potential.”

The team dressed a round tank with gray and white stripes to simulate the jellyfish’s natural habitat, with gray stripes mimicking mangrove roots that would appear distant. They observed the jellyfish in the tank for 7.5 minutes. Initially, the jelly swam close to these seemingly far stripes and bumped into them frequently. But by the end of the experiment, the jelly increased its average distance to the wall by about 50%, quadrupled the number of successful pivots to avoid collision and cut its contact with the wall by half. The findings suggest that jellyfish can learn from experience through visual and mechanical stimuli.

“If you want to understand complex structures, it’s always good to start as simple as you can,” says senior author Anders Garm of the University of Copenhagen, Denmark. “Looking at these relatively simple nervous systems in jellyfish, we have a much higher chance of understanding all the details and how it comes together to perform behaviors.”

The researchers then sought to identify the underlying process of jellyfishs associative learning by isolating the animals visual sensory centers called rhopalia. Each of these structures houses six eyes and generates pacemaker signals that govern the jellyfishs pulsing motion, which spikes in frequency when the animal swerves from obstacles.

The team showed the stationary rhopalium moving gray bars to mimic the animal’s approach to objects. The structure did not respond to light gray bars, interpreting them as distant. However, after the researchers trained the rhopalium with weak electric stimulation when the bars approach, it started generating obstacle-dodging signals in response to the light gray bars. These electric stimulations mimicked the mechanical stimuli of a collision. The findings further showed that combining visual and mechanical stimuli is required for associative learning in jellyfish and that the rhopalium serves as a learning center.

Next, the team plans to dive deeper into the cellular interactions of jellyfish nervous systems to tease apart memory formation. They also plan to further understand how the mechanical sensor in the bell works to paint a complete picture of the animal’s associative learning.

Its surprising how fast these animals learn; its about the same pace as advanced animals are doing,” says Garm. Even the simplest nervous system seems to be able to do advanced learning, and this might turn out to be an extremely fundamental cellular mechanism invented at the dawn of the evolution nervous system.”

###

This work was supported by the Deutsche Forschungsgemeinschaft (DFG, German Research Foundation), the Danish Research Council (DFF), and the Villum Foundation.

Current Biology, Bielecki et al. “Associative learning in the box jellyfish Tripedalia cystophora” https://www.cell.com/current-biology/fulltext/S0960-9822(23)01136-3

Current Biology (@CurrentBiology), published by Cell Press, is a bimonthly journal that features papers across all areas of biology. Current Biology strives to foster communication across fields of biology, both by publishing important findings of general interest and through highly accessible front matter for non-specialists. Visit http://www.cell.com/current-biology. To receive Cell Press media alerts, contact press@cell.com.


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