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Why Navios Maritime Holdings Has Kept Sinking in 2012

As we approach the halfway point for 2012, now's a good time to look back at what's happening with the stocks that interest you. By making sure you know the important things that a company accomplished -- as well as the setbacks it experienced -- you can make a better decision about whether it's a smart investment for your portfolio.

Today, let's take a look at Navios Maritime Holdings (NYSE: NM  ) . Like many of its peers, the shipping company has had to navigate tough waters in recent years, as a glut in shipping capacity and a slowing economy combined to make life difficult for companies throughout the industry. With Greece in turmoil, shipping companies based there are particularly in flux. Let's take a quick look at how the stock is doing so far this year.

Stats on Navios Maritime Holdings

2012 YTD Return (6.1%)
Market Capitalization $329 million
Revenue, Most Recent Quarter $152 million
Year-Over-Year Revenue Growth, Most Recent Quarter (16.4%)
Net Income, Most Recent Quarter $9.5 million
CAPS Rating *****

Source: S&P Capital IQ.

Will Navios sink or swim?
2011 was a very tough year for shipping companies, but in the grand scheme of things, Navios held up pretty well compared to its peers. Continuing depressed levels of the Baltic Dry Index led to much larger losses for DryShips (Nasdaq: DRYS  ) and Genco Shipping & Trading (NYSE: GNK  ) , especially given Genco's lack of locked-in rates on long-term contracts to help even out volatility in charter prices.

So far this year, China is getting a lot of the industry's attention. During the first part of the year, when stock markets overall were rallying, investors were optimistic about a global recovery that could finally help the shipping industry get rid of its capacity glut. Furthermore, when the Chinese government announced intentions to pursue a pro-growth policy, Navios and several of its peers posted strong stock advances -- only to give back those gains as economic data from China showed the extent of the threat to its future growth.

Despite its challenges, Navios sports a high dividend yield topping 7%. Still, as the owner of the general partner of Navios Maritime Partners (NYSE: NMM  ) , Navios holds a nearly 47% stake in the partnership, which carries a much higher dividend yield of 13%. Yet as investors in tanker company Frontline (NYSE: FRO  ) can attest, dividends in shipping companies can go up in smoke quickly in bad conditions. Investors should be careful before counting on those payouts lasting into the future.

It could be some time before Navios gets through the worst of its slump and starts rising again. If you'd rather not wait for more promising investment ideas, let me invite you to learn about three smart long-term stock plays in The Motley Fool's latest special report. It's yours for the taking and is absolutely free, but don't miss out -- click here and read it today.

Click here to add Navios Maritime Holdings to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.

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10/27/2016 4:02 PM
NM $1.15 Down -0.01 -0.86%
Navios Maritime Ho… CAPS Rating: ***
DRYS $0.37 Up +0.00 +0.43%
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FRO $7.36 Down -0.06 -0.81%
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