Let’s see why.

Sainsbury’s Bank Travel Insurance recently conducted a study that showed 76% of respondents intend to go on a holiday and may spend an average £757 each on every trip. Further, January will be the most popular month to book holidays for the year with 6.4 million people intending to lock in their travel plans.

40% of those surveyed would be heading overseas to beach destinations – a holiday that is expected to cost them £1,039 per person. Another piece of information, which I’ll highlight in a moment, caught my eye and had me assessing the prospects for Carnival.

2019 in review

2019 was a bit of a dampener for Carnival’s share price; it declined by 3%. The world’s largest leisure travel company did not have a great ending to the year when two of its ships – Carnival Glory and Carnival Legend – crashed into each other in Mexico in late December.

Though the price decline may seem negative, the stock was able to overcome a significant deficit seen earlier in the year. By mid-October, the share price had plummeted by over 18%. Thus, from that point, it gained 19% and reduced its losses. There were other positive developments for Carnival as well. The company, which operates nine cruise lines, won the ‘Best New Cruise Ship’ award for 2019 for its Italy-built Carnival Panorama by a near landslide.

What makes me bullish on Carnival

The company has several things to look forward to in 2020. It is launching four new cruise ships in the year. Its line-up will see Iona for P&O Cruises UK, Enchanted Princess for Princess Cruises and Costa Firenze for Italian brand Costa Cruises.

Mardi Gras, the fourth of the ships to take to the seas this year, has already been voted as the ‘Most Anticipated New Cruise Ship of 2020.’ Carnival’s largest ship ever won this honour at the sixth annual Cruise Ship Awards. Further, the ship received this award even though its delivery has been delayed, resulting into its first revenue sailing being pushed to November from August earlier.

Carnival also has plans for basing more ships in Europe. For perspective, there were no ships based in the continent in the summer of 2019. Gustavo Antorcha, the company’s Chief Operating Officer, speaking on the topic, said “You will see Europe becoming more important.”

And finally, I’ll go back to the Sainsbury’s survey I had cited earlier. Its results show that cruises would be the most expensive type of holiday in 2020 and people are willing to spend around £1,650 per person.

There can be choppy waters for the company due to a rise in fuel costs because of the US-Iran conflict. However, a sub-£35 price level, a P/E level of nine to 10 times of its forecast earnings and a dividend yield of 4.4%, in addition to the factors outlined in the article, make this share a great buy for me this January.

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Divyansh Awasthi has no position in any of the shares mentioned. The Motley Fool UK has recommended Carnival. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

And in my estimation, things are not about to get any easier. Let’s look back a bit before we look forward.

Wake turbulence

For the most part, 2019 was a very difficult time for the British Airways owner. Its share price, which had peaked at 664p in early February, had been pummelled down to 413.5p at the beginning of August – a decline of 38%! The political wrangling in the UK related to Brexit was the chief cause of this decline.

The problems faced by British Airways were a major reason for the decline in IAG’s share price. In July, the airline operator was fined £183 million after data of half a million of its customers was stolen from its website.

British Airways’ long-running dispute with its pilots has also damaged its owner ,both reputability-wise and financially. The strikes by pilots in September led to a cancellation of 2,325 flights and resulted into a loss of £121 million.

IAG’s share did bounce back, though, and from mid-August until mid-December its price surged by nearly 52%!

The results of election in the UK is exactly what the airline operator needed to set itself up for 2020, as the end of uncertainty boosted its share price.

Into rough weather

Sometimes, turbulent times don’t seem to end. So is also the case with British Airways. An annual poll by Which?, whose results were released in December, showed that the airline ranked the second worst in passengers’ opinions. The respondents were dejected by the food and drink quality, seat comfort and value for money across both short and long-haul services. Not a good look for the “world’s favourite airline” as the carrier calls itself. Just four years ago, it was named as the best short-haul airline.

Early in January, AirlineRatings.com released the raking of the world’s safest airlines. British Airways was unable to make it to the top 20; it had made among those ranks last year.

Geoffrey Thomas, Editor-in-Chief of the publisher, cited two reasons why the carrier slipped out of the top 20: the ageing fleet and a high number of non-critical incidents.

Headwinds

Poor customer satisfaction, data privacy issues, and the tiff with pilots (though they have voted to settle their dispute with the carrier) aren’t the only reasons I wouldn’t invest in IAG right now. The rising fuel prices because of aforementioned tensions between the US and Iran are a big factor.

Fuel prices account for about a quarter of IAG’s operating expenses and are its largest variable expense. Combined with the factors mentioned above, they make for a strong case against the airline operator. At about 600p a share, the share is a thumbs down for me.

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Divyansh Awasthi has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Data from the Wine and Spirit Trade Association (WSTA) showed that the popularity of champagne and other forms of sparkling wine dwindled in 2019. Sales of premium champagne tumbled by 28% to 13 million bottles last year. These bottles brought in a revenue of £613 million. For comparison, in 2016, over 23 million champagne bottles were sold, which had brought in revenues of £753 million.

Filled to the brim?

It is the change in young people’s drinking habits that has led to the decline as the WSTA sees it. A surge in demand for cheaper options like Prosecco have eaten into the traditional champagne and sparkling wine market, too.

Philip Hammond, former Chancellor of the Exchequer, is also partly responsible for the decline. His increased tax in the 2018 budget, which came into force in February 2019, led to a rise in duty on still wine by 7p and on sparkling wine by 9p a bottle.

Taking ‘Stock’ of ‘Spirits’

Stock Spirits caters primarily to the Central and Eastern European region, with Poland and Czech Republic accounting for over 75% of its revenues. Though its “cases sold” and sales figures dwarf in comparison to heavyweights like Diageo, it is by no means an insignificant player. It thrives on locally and regionally popular brands.

The factors best in favour of the company include vodka being its mainstay and experiencing growth in terms of both volume and value. Poland being the third largest vodka market in the world certainly helps the company!

However, there are a few causes of concern. 30% of the company’s revenue now come from premium products. With both Poland and the Czech Republic proposing a rise of 13% and 10% respectively on spirit sales from January 2020, I cannot rule out a change in customer preferences towards premium products.

Further, Western Gate, while demanding a special dividend in December, had asked for a review of the company’s capital allocation policy. The firm, which owns 10% of Stock Spirits, has also expressed concern that its acquisitions – Dublin Liberties Distillery Company, Distillerie Franciacorta and Bartida – have not contributed to the company’s profits in 2019 at all. It further claimed that no returns from these acquisitions may be forthcoming until 2023.

2019 was a sobering year for Stock Spirits’ share price, which declined by 5%. In my estimation, a possible change in consumer tastes – especially due to increased taxation, and concerns raised by Western Gate – merit a cautious stance. I think it may be worthwhile to wait a bit, around two to three months, before raising a toast to the stock.

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Divyansh Awasthi has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

With this approval, the drug – which was already in use for treating multiple forms of cancer – creates a niche in cancer treatment. The approval was provided by the US Food and Drug Administration.

Lynparza is classified as a poly ADP ribose polymerase (PARP) inhibitor. It helps in saving cells’ DNA repair mechanism, which stops cancer cells from duplicating. In this manner, it stops the sustenance of tumors. The latest approval will allow it to be used by pancreatic cancer patients on whom chemotherapy had been ineffective even after 16 weeks of treatment.

A brief background

AstraZeneca and Merck had announced a collaboration on oncology in July 2017. At the time, Lynparza was used for ovarian cancer treatment and its pipeline had included breast, prostrate and pancreatic cancers, among others.

On the collaboration, Chief Executive Officer of AstraZeneca Pascal Soriot had said “By bringing together the expertise of two leading oncology innovators, we will accelerate Lynparza’s potential to become the preferred backbone of many immuno-oncology combination therapies as the world’s first and leading PARP inhibitor.”

As part of the collaboration agreement, Merck had decided to pay AstraZeneca up to $8.5 billion in total consideration, including $1.6 billion upfront, $750 million for certain license options and up to $6.15 billion depending upon successful achievement of future regulatory and sales milestones.

What does this approval mean for investors?

AstraZeneca stock has had an excellent 2019. Until December 30, its share price had increased by 31.5% for the year. Its profits have been great as well, powered by new medicine sales which surged by 62% to $2.7 billion in Q3.

Soriot’s outlined objectives for the collaboration with Merck, as stated above, indicate to me that the partnership has been able to achieve its chief aims. Its pipeline is continuing to be realised, which is a testimony to its drug quality. My takeaway from this is that its medicine sales, especially from the oncology vertical, would continue to be strong.

Political uncertainty has subsided in the UK but some headwinds still remain. Globally, economic challenges await the world in 2020. I believe that these factors could push investors towards defensive purchases like stocks of pharmaceutical companies in the first half of the year, which would benefit AstraZeneca.

Its P/E ratio, hovering at the 25 mark and over, is on the higher side, but its continued success with oncology medication indicates further momentum for its share price. Investors are also looking forward to the results from its POSEIDON trial. The initial results of the trial, being conducted for drugs treating lung cancer, were quite encouraging.

The new approval for Lynparza not only provides more treatment options for cancer patients – in my view, it may be beckoning a buying opportunity for investors as well.

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Divyansh Awasthi has no position in any of the shares mentioned. The Motley Fool UK has recommended AstraZeneca. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

From the time the stock debuted on the London Stock Exchange in October 2018, it has never seen a price level higher than its listing at 1,900p. Its financial performance has been dismal as the company has struggled to generate profits on a quarterly basis. As of December 21, the stock is down 57% for the year; it saw its nadir at the end of October when it dipped below 400p. But since that time, the share price has been on a broad uptrend.

A new driver?

According to a report by Autocar, billionaire businessman Lawrence Stroll may be assembling a consortium to buy a large stake in Aston Martin. While Palmer, understandably, declined to comment, the stock price received a boost on hopes of a takeover. Though Stroll has an association mostly with fashion brands, he does have a foot in the auto business by means of owning Racing Point, a Formula 1 team.

Market participants were quick to point out the potential synergies that can be tapped between his team and Aston Martin, and the fact that his son – Lance – races for the team. It could be a good look for the luxury car maker and may breathe new life into the company.

On the other end of the spectrum were concerns regarding whether Stroll would be able to turn the ailing carmaker’s fortunes around. His lack of experience in the automotive business, as well as the fact that Aston Martin is the title sponsor for the Red Bull Racing team (which will be an issue if Stroll takes the former over at this time) were among the chief worries.

However, in general, stock markets were relieved that Aston’s share price was rising.

Get set… Wait?

It is not a given that Stroll will take over Aston Martin. It is not even certain the extent to which stakeholders in the carmaker would be ready to cede control. At this juncture, the company is betting on its upcoming luxury SUV – the DBX – to turn its financial situation around.

If a stake sale does go through, it will relieve current shareholders of the company. But what about potential investors? Given the recent uptrend, it may be time to get in on the stock – but in a measured manner. As per my understanding, there are not enough signs to go all in and buy the stock. However, there are some green shoots and in my opinion the price level of around 450-480p may present a compelling proposition to buy a small amount.

Thus, at this stage, I believe you may consider sitting in the passenger’s seat; the case for taking the driver’s seat, though, is not compelling enough.

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Divyansh Awasthi has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.