Bon voyage with Carnival Cruise


Q. My wife and I recently returned from a Carnival Cruise vacation. We were curious to find out what you think about this company's stock as an investment.

A. You may wish to book passage on this company's stock as well.

Carnival Cruise (around $18 a share, American Stock Exchange), heavily advertised operator of cruise ships, hotels and casinos, is a stock worth buying based on the company's solid 20 percent earnings growth rate, said Paul Mackey, analyst with Dean Witter Reynolds Inc.

Even persistent worries of recession and high oil prices shouldn't shipwreck this travel company's prospects.

"In an economic slowdown, people will be looking for the bargain short trips offered by Carnival, and its ships continue to be booked at 100 percent capacity," observed Mackey. "Furthermore, fuel costs comprise only 4 percent of its total expenses and its ships are very fuel efficient, traveling at night and sitting at ports for long periods of time."

Q. I am not comfortable with the stock market right now and would like to sell my 75 shares of R.R. Donnelley & Sons Co. Do you think I should hold on to see what happens, or get out while I can?

A. Whether you stay in the market depends on your personal comfort level, but this company does continue to print up profits.

Stock of R.R. Donnelley & Sons (around $40, New York Stock Exchange), the large commercial printer, should be held based on the firm's good financial position, solid cash flow and 'N potential for profits, said Rita Spitz, analyst with William Blair & Co.

"Now that a federal judge has cleared the way for Donnelley to acquire the Meredith/Burda publishing joint venture, the company's cash flow will be enhanced," said Spitz. "When this deal is consummated, it will be the biggest one ever for Donnelley."

Q. All the retail stocks seem to be down in the dumps. Is this the time to sell my Gap Inc. stock in light of the weak economy?

A. There's no gap in its earnings potential.

Gap Inc. (around $52, NYSE), well-known operator of apparel stores, has done considerably better than many competitors because of its good product line and reasonable prices, said Gary Jacobson, analyst with Kidder, Peabody.

Because of that, it should do well despite a difficult retailing environment and a slower economy, he believes.

"The Gap doesn't attempt to sell a lot of different clothing styles or price-ranges of clothing, so the consumer knows what to expect whenever he or she enters one of the stores," said Jacobson, who believes that even in a recession basic jeans and T-shirts will be in demand. "The Gap and GapKids have particularly loyal followings among the pre-teen and teen-age consumers."

Q. We recently discovered a 1930 stock certificate for 40 shares of Twin States Natural Gas Co. of Delaware. Could you tell me if this firm still exists and if its stock is worth anything?

A. This utility really tortured itself and its shareholders with mergers that weren't made in heaven.

Twin States Natural Gas Co. of Delaware was sold in 1932 to Hillcrest Natural Gas Co., in a plan in which each 40 shares of Twin States became one share of Hillcrest.

Four years later, Hillcrest Natural Gas Co. merged with Northeastern Gas & Oil Co., each share becoming three shares of Northeastern.

"Unfortunately, Northeastern liquidated in 1941 and your shares are worthless because the company is no longer in existence," said Robert D. Fisher, vice president with the R.M. Smythe & Co. stock-search firm.

Q. I am a full-time volunteer at our local Veterans Administration hospital and receive no pay for my time and support. However, my travel and uniform expenses have been increasing. Can I deduct any of this on my personal return next year?

A. Out-of-pocket expenses incurred in providing volunteer services to a public charity are deductible as charitable contributions, said Barbara Pope, tax partner with Price Waterhouse.

"You can deduct 12 cents a mile traveled in providing your volunteer services, plus any parking and toll booth expenses," -- said Pope. "Remember, however, to keep detailed records of mileage, auto expenses and uniform expenses."

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