Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Navigator Holdings (NVGS -0.67%) jumped as much as 18% in early trading today after announcing the exercise of new-build ships. Shares settled at a 9% gain later in the day.
So what: Navigator Holdings is exercising an option to build three more 35,000 cubic meter ethylene/ethane capable semi-refrigerated liquefied gas carriers. They will cost $78.4 million each and are being built in advance of an expected explosion in LNG exports from the U.S.
Now what: From a strategic standpoint you can see why the move is being made now. LNG is expected to be a big export from the U.S. to regions around the world where the commodity is far more expensive. It's tough to predict the exact return on investment, though, until dayrates are defined for vessels when exports begin. This is an incremental positive, but I'd like to see more details before getting too excited.
