"If you think filling up an SUV is painful, try footing the bill for a massive 1,000-foot ocean liner -- or in the case of Carnival Cruise Lines (NYSE: CCL), an  entire fleet of 84 floating cities," notes value investor Nathan Slaughter.

In his Half-Priced Stocks he explains, "Despite unprecedented fuel costs, the company continues to power forward." Here's his bullish review. 

"Last quarter, Carnival shelled out $530 per metric ton for fuel, up sharply from $330 per ton a year ago. And after pumping about 800,000 metric tons, the company rang up a total fuel bill of $425 million.

"For the year, management is expecting fuel costs to come in about $750 million higher than in 2007, which will trim earnings by about $0.92 per share. Fortunately, the company is in a position to absorb those higher costs.

"Over the past three months, 2 million passengers have boarded a Carnival ship, for an occupancy rate of 104.8% (indicating some berths held more than two guests).

"And those visitors paid $2.6 billion for their tickets and plunked down another $743 million in the lounges, casinos and gift shops after they arrived on board.

"Combined, those $3.4 billion in quarterly revenues are nearly $480 million (+16.5%) ahead of last year's total. That works out to about $230 in sales from every one of the firm's 14.5 million available berths.

"This key metric, gross revenue yield, continues to rise at a steady clip -- suggesting that management is doing a commendable job of squeezing more and more revenues from its ships. 

"Meanwhile, by diligently cutting all non-fuel expenses, net income actually came in at $390 million, or $0.49, a penny ahead of last year. In other words, Carnival has taken just about the worst that can be thrown at it. And not only did it stay afloat, but actually showed a year-over-year gain.

"If the company can tread water during this period of unprecedented fuel costs, then imagine what it can do when operating conditions become a little sunnier. On that front, there are plenty of encouraging signs.

"First, occupancy levels remain above 100% and advance bookings for the next 12 months are tracking as strong as ever -- and at substantially higher ticket prices.

"Furthermore, given the dollar's freefall relative to the Euro, Americans looking to visit Europe are increasingly finding cruises to be the most cost-effective way. In fact, Carnival is launching two new ships this month that will be exclusively plying European routes.

"Longer term, cruising continues to gain in popularity, particularly with a weak economy encouraging many travelers to seek out trips that provide more bang for the buck.

"With all-in-one packaging, all-you-can-eat dining and every amenity imaginable for both kids and adults, cruising is actually less expensive than most traditional vacations. The percentage of families coming onboard has doubled over the past six years, and repeat business tends to be high.

"As the dominant leader, no one will benefit from this trend like Carnival. In the meantime, the company is coping with higher fuel costs by tacking on surcharges and tweaking itineraries to replace distant ports of call like Aruba with more accessible destinations.

"Once leisure stocks return to favor, I'm confident that CCL will bounce back strongly. For now, those who take advantage of this pullback can lock in a hefty yield of 4.9%."

Since developing the digest-format for financial newsletters with my mentor, Dick Davis in 1983, I have spent my professional life immersed in the advisory newsletter field, as an editor, columnist, author, speaker and educator. In addition to this new project, my coverage of the newsletter community appears in MSN Money and marketwatch, and daily on AOL Finance & Money.