It's a great day - down 5%. Let's just hope that we can get a few more days like this this week. $10.50 is support. If that gets taken out, then sub $10 is likely.
DSX and NM are getting equally crushed along with such stocks as BBEPP for some reason. I'm going to have a lot of buy set-ups next week it looks like. My move to 100% cash is looking good. But I should have shorted HEDJ at $63.
DGWIY isn't listed. Guo left US investors high and dry and now is running his own private company that US investors paid for.
Well it looks like Greece is going to go down the tubes. Hopefully people will mistakenly sell NMM thinking that it is a grecian company and push it down below $10. Then we can buy it for the run-up to the mid-August distribution. This is a fantastic trading stock!
P.S. If you are worried about cuts, you might consider NMpH instead. Unless NM goes bankrupt, the distribution will be payed. You can pick them up with an 11.5% yield on a dip right now. And if Greece goes BOOM - maybe 12%+! I've got my low bid in.
The container ships DO NOT support the distribution. Go read the 1st quarter earnings report. They are claiming only 80% coverage. And no one can figure out how they get a figure that high. I can only come up with 73% myself. If my figures are correct, then 27% is return of capital, although the accountants may spin it differently.
Next quarter they may actually get to 80%. Although, they haven't announced the purchase of the new container ship as we all had hoped. Maybe because they need to do another dilutive secondary first.
With BDI going up, next year is looking much better; but since all contracts have been locked in, this year is going to be rough.
As for the stock price of NMM, it will depend on what investors are looking at - better earnings next year due to the rise in BDI ... or the horrible earnings this year and the almost certainty or more dilution.
I will continue to trade the continued waves of optimism and disappointment myself for now.
Yes, in 2017 that could happen. However, for the next two years the distribution seems to be guaranteed by Angeliki. And yes in 2017 the distribution will have to be cut since they can't go on returning capital forever as they are now. However, if BDI continues to recover as it has the past few months, they will be able to cover the distribution and there will be no cut in 2017. Things could sail along smoothly then until 2019 when a huge amount of debt is due.
Earnings last quarter were awful, and could be again next quarter. But as long as Angeliki can raise money to cover the overpayment part of the distribution it can go on as planned. The problem isn't can the company pay the 15% distribution for now - it is how are they going to pay it?
They've already locked in their contracts for the year, so the only way to meet the distribution is to raise money via more secondary offerings. Everyone should be expecting more dilution. This year looks to be horrid which is why the short interest is near 10%!
However, its always about the future, and if BDI can continue is assent, next year earnings could soar as contracts are renegotiated. Then the distribution could be safe until 2019.
Your comments about history are accurate to an extent - but what about 2009?
I picked up all kinds of investments paying over 15% then that have quadrupled. That's because I bought them at the bottom of the cycle. Maybe the same is true for the shippers right now. BDI is at historic lows and if it returns to its highs so will the shippers.
It's bad when Zacks has something good to say. What you want is them to slam your stock - then it will soar!
CVRR jumped 50% after Zacks made them their #1 SELL.
Market Realist says that; "The recent surge in the BDI is mainly due to the uptick in grain volumes in the Atlantic." Is that just a temporary blip? And are NMM's ships moving grain in the Atlantic?
I don't know, but it seems to be good for at least a temporary surge in the price of NMM. NMM is still proving to be a great trading stock, but I'm still wondering if it is really a buy and hold yet.
BOA was right. After earnings watch how fast NMM falls. But at least the shippers are doing a little better. DSX also broke out today. NMM remains a Trader's dream, but I doubt that its a long term hold just yet.