Some of the biggest bargains out there may not appear to be so cheap at first glance. Let’s walk the gangplank to hop on Carnival (CCL) for a closer look at the world’s largest cruise line operator.
Carnival has only been profitable twice in the past 18 quarters. It’s trading for 26 times trailing earnings, and given its debt-bloated balance sheet, that multiple jumps to nearly 60 if you swap out market cap for enterprise value as the numerator.
Carnival also isn’t exactly out of favor right now. The shares have moved higher for seven consecutive trading days, rising 15% in the process. The stock has more than doubled — up 128% — since the start of last year. However, head to the front of the ship and the future journey can be even more promising than the recent past. Carnival is cheaper than you think, and in a few years, you might wish you had bought this undervalued stock.
This post originally appeared at The Motley Fool.