Cautious investors may choose to follow cruise operator Carnival (CCL) chairman Micky Arison’s $21 million disposal and debark. A poor outlook statement alongside first-quarter results (25 Mar) saw the £4.9 billion cap warn about rising costs and lower prices for its cruises compared to the same period a year ago. At £22.94 the shares look expensive on 22.4 times forecasts for 2014.

Arison has sold 525,348 of the US-listed shares at $40.09; Carnival trades on both the London and New York Stock Exchange. His trade is part of a bigger programme to offload 10 million shares for ‘tax planning, estate planning and diversification purposes’ announced on 28 February. Arison has so far disposed of 6.2 million shares.

Last year Carnival split the role of chief executive officer (CEO) and chairman. Arison had been the boss since 1979 but Arnold Donald was handed the CEO role. He brings experience from outside the cruise industry including private equity and running Monsanto’s (MON:NYSE) agriculture business.

Every 100-basis-point improvement to net revenue yields increases earnings by 8%, according to Numis analyst Wyn Ellis. It is therefore disappointing that strong bookings are not translating into higher ticket prices. Ellis reckons the high share price rating already assumes optimistic earnings growth.

It appears Carnival is underperforming its peer group. Royal Caribbean (RCL:NYSE) says its yields will be back to peak levels this year. In comparison, Carnival’s yields are still 11% below their 2008 peak.

THE TRADE

Seller: Micky Arison, chairman

Consideration: $21 million

No. of shares sold: 525,348

Subsequent holding: 104,522,691 (48.5%)