Market data from Reuters shows that Iranian crude oil exports in April reached 2.3 million barrels per day, exceeding forecasts, while May exports are expected to be around 2.1 million barrels per day—or almost 60 percent higher than a year ago.
There is a time to buy debt and there is a time to buy stock. The better route to take right now is the stock for the following reasons:
1. The stock yields over 11% while the bigger bond debt is 8.125%. The better investment is capturing the 3% differential.
2. If the case can be made that the stock is undervalued right here then you buy the cheaper asset. I can't think of to many companies that are trading at a forward PE of 3 times.
3. $40 million left on an announced $50 million dollar stock repurchase program that ends in about 6 months. They have already made the commitment to a repurchase program. If they didn't mind paying in excess of $3 a share on the first $10 million of purchased shares why would they not pay $1.68 a share right now ? Perhaps they don't view the company as being undervalued at the current share price.
4. Share repurchases will help the Earnings per share with a lower share count moving forward.
They should be buying stock below $2 per share. The message they are sending is that they aren't buying here so why should the street.
Most likely she will work on the balance sheet. She will transfer cash from the balance sheet of NNA to NM. Just watch!
How much is NNA debt selling for? near par or at a big discount??? Even idiot Economou is buying back disttressed bonds for ORIG in size. Are NNA bonds low enough for a big hair cut on debt? Seriously this is a battered business and cash is king. Lower the debt by buying bonds, lower interest costs. All these shippers are going bust due to over leveraging their balance sheets assuming they were invincible. NM once had a pristine reputation. The binge buying on the credit card has put NM's existence in peril. If the bonds are to high the best in my opinion is to buy out all the shares from NM not as good as extinguishing debt but taking the NM overhang off. Similar to what Orig did with Drys. NM with is going to be forced to liquidate assets, the preferreds are continuing to accrue, the interest payments continue, so NNA can throw a more legitimate lifeline by buying out NM and NM does need the cash. A clean break. This in my opinion will break NNA free to move back to the range of the IPO as the stock would move back into treasury not being paid dividend and available at an opportune time for use for opportunistic aquisition. AF will lose NM if she doesn't swallow her pride and make the necessary moves. The port has to go also. Should have been gone 2 years ago. But greek shippers had a tendency to be bull headed and think they have all the answers and put themselves on the brink of bankruptcy en masse. NNA relieved of NM will be free to move as a viable entity of its own and probably get to 10 bucks over the next year or so. Otherwise its gonna get lumped with NM and as the market turns cyclical and down, opportunity will yet again be lost. And you can shutter everything Navios.
I'd vote for the repayment of debt.
I was looking for a raise in the dividend. It would have helped NM too.
But since the stock price is staying put at these levels.
12% is more than enough.
Angie should keep working on the balance sheet.
I think Q1 shows management is just trying to delever. It would be great to see some share repurchase, even a token amount, but debt paydown seems to be the name of the game. We should expect to see this continue the rest of the year and possibly into 2017. Considering all of the squealing I have read over the years about how NNA has too much debt, I can hear the crickets chirping now that they are paying it down in meaningful amounts.
Based on the expense structure and current charters, I come up with a preliminary estimate of .13 EPS in Q2. We are only halfway through the quarter, so the path of spot rates for the rest of the quarter will have a material impact on this estimate as time passes.
This stock can never get out of its own way. So much promise never realized. a 12% investment is good however it won't take much to go from 1.69 a share to .99 or lower.
Which makes sense with falling 2nd market tanker prices and high leverage.
It will go down way faster. Just in the next quarter they will have a major cash inflow from the 2 sold chemical tankers.
finally the queen of debt is doing the right thing. paying down the credit card. saving some cash too for the day which WILL come soon that NNA buys out NM because she has run out of money to pay NM's credit card. NNA will become a stand alone. NM will be forced to divest to survive. AF's fortune is in NM. NNA will be sold back to NM and the port will be sold off. There are NO other options for her, unless she buys NM out herself, which i don't think she has that capacity. I took hits forever on this. DEBT is killing shippers. When you see a Greek shipper bragging on how much debt they can take on, one should at least pay attention. Were it not for the insurance settlement a few years back, NM would have already folded. AF is gonna be forced to divest anjything of value to salvage her approx 30% stake in NM. A 1 cent beat and the stock will wallow till next season.
Analyst asked her directly (twice) if she would disavow using NNA like recently proposed to assist NM at any time in the future. In her first response she said there is no plan like that "today" and in her second response she referred to her first statement and then added that there are no discussions regarding anything sinmilar "at present."
Not quite what the analyst was trying to tease out...
What vote? Do you mean the annual election of Directors? Assuming shareholders send some kind of message (big assumption) she'll blow that off too like she did several analyst questions today.
It looks to me like NNA is in full debt repayment mode. I would very much like to see them buy back some shares here, but I'd guess that we will see gross debt down by $100MM or more by the end of the year from the 3/31 number with cash balance at the same level or higher.
Have not heard the call yet, but ultimately anything she says does not matter. When is the proxy vote? That is when you could see some action.