Investing can be a long and arduous journey, but maintaining a steady course over long distances can be as profitable for Fools as it can be for the world's dry-bulk vessel fleet.
From the early stages of the perfect storm that continues to challenge shippers, I have kept Diana Shipping
Like a Capesize sponge, Navios absorbed a 39% decline in the average daily charter rate for vessels and a hefty 56% drop in revenue to post a $12 million net gain in the first quarter of 2009. A commensurate 69% reduction of operating expenses provided the key to a profitable quarter, but the company's greatest achievement remains the strong liquidity position and the security of future revenue flows relative to its peers.
With indebtedness at just 43% of book value and $241 million in cash, Navios shares none of the acute debt repayment concerns of competitors like DryShips
If global overcapacity is the crux of the sector's medium-term woes, then Navios Holdings' order book of seven new Capesize vessels could be considered counter-cyclical. With time charter contracts or contracts of affreightment in place for each of them, however, and the significant bonus of insurance coverage to protect from customer defaults, I believe Navios' growth profile to be reasonable under the circumstances. Toss in a lingering (for now) 5% dividend yield, a diverse fleet composed of owned and chartered-in vessels, and an intriguing port facility in Uruguay, and Navios Holdings continues to return signs of life on this Fool's long-term radar.
The "dry bulk shipping" tag within Motley Fool CAPS lists 16 companies, 15 of which have been rated by our members. Join our online community today and share your views on the offerings in this sector or any other. CAPS is free and fun!
Fool contributor Christopher Barker has been aboard these massive dry bulk carriers and felt like a kid in a candy store. He can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He owns shares of Diana Shipping. The Motley Fool has a bone-dry disclosure policy.