Note: The largest risk to Navios Maritime Partners (NYSE:NMM) in my view is the potential for abuse from their GP, Navios Maritime Holdings (NM). This risk is heightened because I estimate NM is at least $200M underwater at this time (i.e. long-term debt exceeds tangible assets and equity by $200-$300M). However, NM has recently made a lot of progress, covered here. Navios Maritime Acquisition (NNA) is a 'cousin company,' which has also significantly stabilized and is now poised to benefit from Middle East instability, our latest public report on NNA is posted here.
NMM trades near 25 cents on the dollar for net asset value... Is this too good to be true?
Image Credit: Point Me, Guy Downes
Navios Maritime Partners Overview
Navios Maritime Partners (NMM) is a publicly traded partnership controlled by Navios Maritime Holdings (NM), with a primary focus on dry bulk and container vessels with attached charters. NMM was previously listed as my ‘top idea’ for 2018, but despite fairly strong fundamental performance, the stock pricing has been abysmal. In fact, I covered it as my official 'top idea' at Marine Money 2018, and since then the stock has lost an embarrassing 55%.
Source: Google Finance, NMM, 1-Year Chart
A market bystander might expect that this is due to massive cash outflows, terrible market performance, insider abuse, heavy dilution, or a combination...
In fact, none of this is true. NMM has generated steady cash flow over the trailing 12-months, there has been no signs of abuse, and they have actually initiated a repurchase with y/y share count down by about 2-3% and they have paid a well-covered dividend with a 10% yield. The sole major negative has been a recent 15-1 reverse split, but this has reduced the common share count to 11M, so no change to underlying
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