Must-know overview: Investing in Navios Maritime Acquisition Corp. (Part 1 of 6)
Navios Maritime Acquisition Corp.
Formed in March 2008, Navios Maritime Acquisition Corp. (NNA), owner and operator of tanker vessels, mainly focuses on the transportation of petroleum products (clean and dirty) and bulk liquid chemicals. NNA’s operations are managed by Navios Tankers Management Inc., a subsidiary of Navios Maritime Holdings Inc. (NM).
Owning a large fleet of modern crude oil, refined petroleum product, and chemical tankers, NNA’s strategy is to charter vessels to international oil companies, refiners, and large vessel operators under long-, medium-, and short-term charters. Its strong motive is to maintain long-term customer relationships.
Price performance chart
Trading at a market cap of $585.4 million, NNA records a dividend yield of 5.4% and has a beta of 0.85. Meanwhile, in the past year, NNA has registered an increase of 9.7% compared to the 19.1% S&P 500 increase and 66.3%, 46.4%, and 58.7% increases recorded by TNP, DAC, and FRO, respectively.
The Navios connection
Navios Holdings, a vertically integrated seaborne shipping and logistics company with 60 years of operating history in the shipping industry, holds almost 43.1% of NNA’s common stock as of March 14, 2014. Being a part of the Navios group, NNA enjoys economies of scale below industry-average operating expenses and much lower G&A expenses per day per vessel compared to peers.
As of March 14, 2014, NNA’s fleet consists of a total of 44 double-hulled tanker vessels (11 VLCC tankers, eight long-range product tankers, 21 medium-range product tankers, and four chemical tankers), with an average age of 4.2 years. Currently, 36 vessels are on the water and eight vessels are to be delivered over the next few quarters. Navios Acquisition also has one of the largest VLCC fleets underwater among its publicly listed peers.
The Guggenheim Shipping ETF (SEA) is the composite of all shipping companies.
In this series, we’ll analyze Navios Acquisition and its strengths, like its chartering strategy, low cost, and access to capital. Unlike its peers, NNA adopts a profit sharing strategy to sustain itself in the fluctuating shipping market.
Browse this series on Market Realist:
- Part 2 - Navios Acquisition’s chartering strategy captures tanker upside
- Part 3 - Navios Acquisition’s strong management team and access to capital
- Part 4 - Low vessel operating expenses benefit Navios Acquisition’s profits
- Investment & Company Information