NMM - Navios Maritime Holdings: Sell On Lack Of Catalysts And Tangible Value

2023-05-25 00:22:01 ET

Summary

• Company reports profitable first quarter results due to improved contributions from Navios South American Logistics ("Navios Logistics") and Navios Maritime Partners ("Navios Partners").
• That said, it's hard to assign any meaningful value to Navios Logistics as the company remains heavily indebted and faces a $500 million senior debt maturity on July 1, 2025.
• Parent Navios Maritime Holdings is looking even worse with debt and preferred stock obligations exceeding assets by more than $100 million.
• Effectively, both the common and preferred shares now represent options on major improvements at Navios Logistics, substantial price appreciation of Navios Partners' publicly-traded common units, and particularly a buyout at favorable terms by controlling shareholder, CEO, and Chairwoman Angeliki Frangou going forward.
• As I consider none of the above-listed scenarios as likely in the near- to medium-term, investors should avoid both the common and preferred shares or even consider selling existing positions.

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