NMM - Navios Maritime Partners: Statistical Discount With High Business Returns
2024-05-23 00:23:47 ET
Summary
- Navios Maritime Partners offers attractive exposures to durable end markets.
- The marine transportation industry has cyclical tailwinds, making it an attractive domain for investment, with potential revenue growth due to higher freight rates.
- Key risks surround NMM's complex organisational and tax structure.
Investment Thesis
Now that we are almost through the Q1 2024 earning season, sector-specific growth numbers are available for analysis. The median S&P 500 stock grew earnings 7% year-on-year in Q1, as seen in Figure 1, however the distribution of this was highly skewed. For instance, utilities and communication services increased earnings by 30% and 38% as a group respectively, but healthcare and materials company's saw a 26% and 21% decline in bottom-line growth as a group respectively (see more here ).
The industrials sector has stood out in 2024 a quality segment in a frothy broad market, one that has seen its P/E multiple increase back above 21x.
In late 2023, we had advocated for a tactical rotational to the industrial sector. So far, we have been pleased with a number of picks made....
Navios Maritime Partners: Statistical Discount With High Business Returns