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Ariel Investments Sees Green Light Post Pandemic Travels for Carnival Corp (CCL)

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Jose Karlo Mari Tottoc
·3 min read
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Ariel Investments, a minority-owned investment company that focuses in small and mid-capitalized US based stocks, published its third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A positive return of 4.56% was recorded by the fund for the 3rd Quarter of 2020, ahead of its Russell 2500 Value benchmark that returned 3.54%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.

Ariel Investments in their Q3 2020 Investor Letter said that they were able to distinguish a value in Carnival Corporation & Plc (NYSE: CCL) and despite performing lower, they are still confident in their position in the company. Carnival Corporation & Plc is a global cruise vacation company that currently has a $23.173 billion market cap. For the past 3 months, CCL delivered a huge 49.15% return and settled at $20.96 per share at the closing of January 15th.

Here is what Ariel Investments has to say about Carnival Corporation & Plc in their Investor Letter:

"Global cruise vacation company, Carnival Corporation (NYSE: CCL) traded materially lower over the trailing twelve months. As a result of the global pandemic, CCL cruise operations have been suspended since March. The cancelled voyages and reduction in global bookings have had a material impact on financial results. Over the long-term, we believe Carnival’s distinct positioning as the low cost leader utilizing its scale, will remain a key competitive advantage. In our view, the headwinds the company is experiencing will soften and CCL’s solid balance sheet will help the company navigate through this difficult period. At current levels, we view the risk/reward to be extremely favorable."

Most Expensive Cruises in the World
Most Expensive Cruises in the World

Rawpixel/Shutterstock.com

Last December 2020, we published an article telling that Carnival Corporation & Plc (NYSE: CCL) was in 37 hedge funds’ portfolio. Its all time high statistics is 53. Carnival Corporation & Plc delivered a -2.86% return YTD.

As of September 2020, Ariel Investments had a 538K share position in CCL that amounted to $8 million. This made Ariel Investments as a part of the top 25 hedge funds that holds most of CCL’s stake, just behind Millennium Management with $8.3 million worth of CCL shares. The top hedge fund in CCL is Citadel Investment Group with $48 million. However, our calculations showed that Carnival Corporation & Plc (NYSE: CCL) does not belong to the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website.

Disclosure: None. This article is originally published at Insider Monkey.