Navios Maritime Partners trade

December 18, 2012

Been watching for other dividend paying stocks.  I want to diversify into a different area than what I already have.

Completed a test purchase of a small amount of shares at $12.50 a share in Navios Maritime Partners (NMM).  NMM is a master limited partnership, and pay a quarterly dividend.  The dividend is quite high, at 14%.  This normally would call for caution, as extra high dividends frequently spell problems for a company. You want to look for a nice dividend, but not out of line with other companies in the same area.  After doing some research, including seeing that they have been navigating the financial crisis pretty good – they actually have been raising their dividend since going public in 2007.  Most of the companies in this sector have cut or eliminated their dividend.

They also received a pretty large insurance payout that will help them weather the low shipping rates that have plagued the industry.  Looking at a chart of the Baltic Dry Index which tracks the dry good shipping industry, it looks like a bottom may be forming.

The dry bulk shipping sector was killed in the financial crisis, as shipping rates plunged.  Many high flyer stocks, such as Dryships (DRYS), once traded at $120 and now trade under $3.  But Navios seems to have strong financials, though with a few warning signs, hence the small share purchase.

My sell stop is at 11.99, right below the recent low made in November at 12.01.

 

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